- Studios have released movies early to digital platforms as theaters across the US close due to the coronavirus, and some are already popular on premium video-on-demand services.
- But analysts question whether a PVOD boom is likely once theaters reopen.
- Comscore senior media analyst Paul Dergarabedian said the last two years at the box office show how the theatrical window is still working.
- Research firm Lightshed Partners said in a recent report that the "bar for PVOD keeps moving higher" considering movies on these services usually run for $20 each, and consumers can watch a movie on Netflix at no additional cost.
- Visit Business Insider's homepage for more stories.
With theaters across the US closed due to the coronavirus, studios are dropping movies that were new to theaters on digital platforms for $20 a pop.
Some are already rising up the charts on video-on-demand services like iTunes and Fandango Now. But audiences shouldn't treat this as the new normal, but rather as a short-term solution to the current public-health crisis.
"Obviously movie-theater windows are sacred and we're living in a different world right now," the Comscore senior media analyst Paul Dergaradedian told Business Insider. "The short-window dynamic is only a function of the current situation."
Universal Pictures is the only movie studio so far with plans to fully break the traditional theatrical window, as it's releasing "Trolls World Tour" on digital platforms on April 10, the same day it was intended to hit theaters.
But additionally it released three of its recent theatrical releases — "The Invisible Man," "The Hunt," and "Emma" — on video on demand early, and other studios have followed.
Sony's "Bloodshot," Warner Bros.' "Birds of Prey (and the Fantabulous Emancipation of One Harley Quinn)," and Disney/Pixar's "Onward" are just a few examples, and they're already popular on premium digital platforms.
But analysts say that the future of movie theaters is intact, especially for major releases that generate huge sums of money at the box office. As technology and media research firm Lightshed Partners pointed out in a recent report, nine movies earned more than $1 billion at the global box office in 2019. For studios to replace that through premium video-on-demand services, tens of millions of units would have to be sold.
"You quickly realize just how big the PVOD transactions need to be for the math to work for a studio," the report said.
The 2019 global box office hit a record $42.5 billion and the domestic box office was shy of breaking 2018's record year with $11.4 billion. The last two years at the box office show that the "theatrical window is working" and the popularity of new movies on digital now just goes to show that "people love movies," Dergarabedian said.
In fact, 2020 was off to a healthy start at the domestic box office with $1.7 billion in the first two months of the year, according to Comscore, buoyed by hits like "Bad Boys for Life," "Sonic the Hedgehog," and "The Invisible Man." This year was never going to reach the heights of the last two at the box office, but it still had potential to be a strong year with the likes of "Wonder Woman 1984," "Fast and Furious 9," and more.
"The measures being taken right now are because of the unforeseen circumstances," Dergarabedian said. "And consumers have an appetite for new content. We are literally stuck at home."
Studios likely feel similarly. A person with direct knowledge of Sony's digital-release strategy for "Bloodshot" told Business Insider that it was only due to the current circumstances because audiences aren't able to see the movie in theaters. Once theaters reopen, it will be "business as usual," the person said.
In another report, Lightshed credited Universal with dropping "Trolls World Tour" day-and-date with its planned theatrical release, as it's a low-risk experiment that could pay off with families stuck at home. But the firm continued to question how PVOD could perform once theaters reopen.
"It feels like the bar for PVOD keeps moving higher, given the incremental cost of $20/transaction, particularly when there is a new movie on Netflix every single week at no additional cost," the report said.
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