NBCUniversal CEO Jeff Shell: PVOD Not Very Cannibalistic to Theatrical, Home Entertainment Markets

With movie theaters in California set to open to full capacity June 15, NBCUniversal CEO Jeff Shell is upbeat about the exhibition business as it enters the important summer period. And with good reason. Universal Pictures is set to release on June 25 in the U.S. tentpole title F9: The Fast Saga.

The ninth installment in the Fast and Furious franchise, with a $200 million production budget, has already generated $269 million in foreign revenue since launching on May 19 — including almost $204 million in China.

“It’s a big day tomorrow,” Shell said June 14 on the virtual Credit Suisse 23rd Annual Communications Conference. “[F9] is really the first big blockbuster post-pandemic, and we already have close to $300 million of box office revenue in the door. The movie is very satisfying if you’re a ‘Fast and Furious’ fan, which I am and was before I came here. And there’s a lot of life [left] in that franchise.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

With the domestic F9 box office likely to top $50 million at the box office, Universal, per its new agreement with exhibitors, would open the theatrical window to at least 31 days. Universal could offer the movie into homes after just 17 days in theaters for a $19.99 digital rental (PVOD) if the box office falls below $50 million.

Shell said PVOD has been a success during the pandemic, with early signs that the distribution channel is not siphoning away packaged media and transactional VOD sales as initially feared. He said the studio was worried PVOD would cannibalize theatrical revenue, DVD, Blu-ray Disc and electronic sellthrough.

Those concerns extended to the sequel to 2017’s The Boss Baby, which generated $30.2 million in combined DVD and Blu-ray Disc sales. Universal is slated to debut the animated sequel, The Boss Baby: Family Business, on the Peacock streaming service and in theaters on July 2.

“The early data is that PVOD is not very cannibalistic to either channel,” Shell said. “We’re hitting a new market for the vast majority of people who [use] PVOD, and PVOD is very profitable to a movie studio.”

Indeed, the executive admits the margins surrounding PVOD are higher than in any other distribution channel. Shell said he doesn’t know what the future holds for early home entertainment access, but the detente reached with exhibitors on the issue is working.

“And right now, it appears to be, in many ways, an additive revenue stream for us and for others,” he said.

Shell said the studio decided to be opportunistic and not just experiment releasing Boss Baby 2 concurrently on Peacock, but expedite the movie’s chance to be “really successful” financially.

“I think there’s not a lot of movies like this coming in this [concurrent] corridor,” Shell said. “It [is] very much movie by movie situation. And you’re going to see a lot of that … people trying different things. And as we recover, depending on if the movie is more domestic or international, will drive a lot of those kind of changes market by market.”

Meanwhile, with the 2020 Tokyo Summer Olympics set to begin on July 23, Shell said NBCUniversal has become more comfortable that the Games will actually occur — despite ongoing COVID-19 concerns in Japan — adding that depending on ratings, the quadrennial spectacle could be the most profitable Olympics in the history of the company.

“If you want reach, there is nothing better than the Olympics,” he said. “You have 17 days where you dominate every night. You have … this exciting [competition] coming together after a world-changing event to celebrate athletes, success, stories and drama.”

The CEO said that what generally drives Olympics ratings is the strength of the U.S. team in marquee events such as gymnastics, swimming and track & field.

“We’re really pretty optimistic about this,” Shell said. “Simone Biles is just amazing and she’s going to be, for the first week of the Olympics, on every night. And then our swimming team is really strong and our track and field team is really strong.”

In addition to prime time TV coverage of the Games, NBC Sports will stream hundreds of hours from Tokyo on the Peacock hybrid AVOD/SVOD platform.

NBCUniversal CEO: ‘The Office’ Doing Better on Peacock Than Netflix

On New Year’s Day, NBCUniversal’s Peacock streaming service acquired away from Netflix exclusive streaming rights to reruns of “The Office,” in a license deal reportedly worth $500 million. Episodes of the ensemble-cast sitcom, which last broadcast in primetime on NBC in 2013, have regularly ranked among Nielsen’s weekly Top 10 streamed content on the television. Indeed, “The Office” was by far the top TV show in minutes watched in 2020, according to Nielsen.

That acquisition appears to be paying off for Peacock. Speaking on the Jan. 28 fiscal call, NBCUniversal CEO Jeff Shell said the right things about the fictional Dunder Mifflin Paper Company series, which co-starred Steve Carell and John Krasinski, among others.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

NBCUniversal CEO Jeff Shell

“We’ve had it now for almost a month, very pleased with how it’s doing,” Shell said. “Our usage among our customers are actually higher than we think the usage was among Netflix customers.”

With Peacock marketed as a hybrid SVOD/AVOD service, with an emphasis on ad-supported video, NBCUniversal is using the initial season of “The Office” and other high-profile content as a loss-leader for Peacock’s free option, with access to subsequent seasons on Peacock’s two paid tiers ($4.99 with ads; $9.99 without).

“We’re seeing that people who are watching ‘The Office’ on Peacock are watching lots of other comedies,” Shell said. “So it’s really driving usage of ‘Parks & Recreation,’ and really driving ‘Brooklyn Nine-Nine,’ among others.”

NBCUniversal employed the strategy acquiring streaming rights to England’s Premier League soccer, which Shell said has driven viewership of Western drama “Yellowstone.” He said the recent license deal involving the WWE Network streaming service would help generate viewership for WWE events on USA Network, among other content.

“We believe, there’s kind of an ecosystem here, like the whole world of broadcast where … we can cross promote people into different things,” Shell said. “And that certainly seems to be working and ‘The Office’ has really helped.”

NBCUniversal Boss Defends Expedited Movie Access in the Home

Long before Warner Bros. decided to release its entire 2021 theatrical movie slate (beginning with Wonder Woman 1984 on Christmas Day) into the home and cineplex simultaneously, Universal Pictures made waves generating more than $100 million in premium VOD revenue early in the pandemic releasing animated sequel Trolls World Tour into homes instead of on the big screen.

The studio then slashed the 90-day theatrical window down to 17 days. Instead of affording exhibitors three months of exclusivity, Universal offered to revenue-share PVOD sales with accommodating movie chains such as AMC Theatres and Cinemark.

What is clear about the film business is that while the rest of the entertainment business evolved in a rapid way across the world, the film business stayed stuck in the mud on the traditional theatrical windowing basis, says Jeff Shell, CEO of NBCUniversal, parent of Universal Studios.

Speaking Dec. 8 on the virtual the virtual UBS Global Investor confab, Shell said the traditional release window ignored a market segment of consumers who love movies, but who either don’t go to the theater as often or prefer to watch new releases in their home.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Somebody gets excited about a movie that weekend, can’t get a babysitter, and decides they’ll see it in a couple months or next year on HBO,” Shell said. “We, as a movie company, did not serve those customers. And that is not the right way to maximize what is the Rolls Royce content of the entertainment business. We’re leaving a lot money on the table [ignoring $19.99 PVOD].”

Shell said Universal Pictures remains a staunch advocate of the moviegoing experience, including driving to the cineplex and watching content on a big screen with enhanced sound the way filmmakers intended viewers to consume the content.

“I think when the pandemic ends, it’s going to be a bit like the roaring ’20s, when you’re not going to want to be at home anymore,” Shell said. “The idea of sitting at home in your apartment on a Friday night watching Netflix is going to be less appealing.”

But he said the studio is also cognizant to the reality about changing consumer habits watching movies, including on portable devices. Shell reiterated that to Universal, the transactional business model of movies remains of primary importance.

Shell admitted he has been outspoken advocating for the collapse of the theatrical window, arguing it brings enhanced value to the overall business, including theaters.

“There are a lot of people who want to watch a movie in a non-premium way, which is in the home” he said. “I think theatrical will continue to thrive and as more windows collapse … more money is going to made by everybody involved in the movie business. And it’s better for consumers.”

CEO Jeff Shell: Premium Content Going to Peacock AVOD

As ad-supported VOD platforms proliferate in response to SVOD market domination by Netflix, Disney+, Hulu and Amazon Prime Video, the distribution channel, which includes The Roku Channel, IMDb TV, Pluto TV, Shout! Factory TV and Tubi, has been dogged by a dearth of higher profile content.

NBCUniversal’s Peacock streaming service, which launched in July as the market’s first hybrid SVOD/AVOD business model, is looking to change that. The free ad-supported VOD option is targeting original content, including live sports such as the U.K.’s Premier League soccer from the U.K. to entice viewers, according to CEO Jeff Shell.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Speaking Dec. 8 on the virtual UBS Global Investor confab, Shell said making the free AVOD Peacock service “as strong as possible” in programming is the company’s primary goal in the short term.

Jeff Shell

“We want viewer penetration, so we will offer the vast majority of our strong programming on the AVOD service to continue this momentum we are seeing in distribution,” Shell said, adding that as Peacock SVOD subscriptions increase, the optionality for distribution increases.

“There are many people signing up for premium Peacock to get specific niche programming that we’re not offering on the AVOD service,” he said. “And I think we’ll continue to do that, especially since [SVOD sub growth] has been stronger than we expected.”

Shell disclosed that the Peacock SVOD service generated 26 million subs through Dec. 7 — up 4 million subs since Comcast’s fiscal call last month. He said the service is being considered for selective international markets, which would not include regions such as the U.K., Germany and Italy already covered by sister satellite TV company Sky.

“Peacock is a product we will use selectively in markets,” Shell said. “The original programming we’re making for Peacock will obviously be shown and used on Sky services as well.”

Bonnie Hammer Upped to Vice Chairman of NBCUniversal; Pearlena Igbokwe to Chairman of NBCUniversal Content Studios

Comcast Corp. continues to restructure senior management in the aftermath of several abrupt senior executive departures at NBCUniversal.

The media giant Sept. 9 announced that 30-year veteran Bonnie Hammer has been tapped to take former NBCUniversal vice chairman Ron Meyer’s position, while Pearlena Igbokwe replaces Hammer in the chairman position of the NBCUniversal Content Group, which includes Universal Television, Universal Content Productions and NBCUniversal International Studios. Both positions report to NBCUniversal CEO Jeff Shell.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Meyer, 75, exited the studio last month after 25 years following disclosure of a personal affair with a young actress. His ouster followed the dismissal of NBC Entertainment chairman Paul Telegdy, who was shown the door following allegations of promoting a hostile work environment.

“This is an exciting time for our business, with demand for entertainment content at an all-time high and more distribution platforms available than ever before,” Shell said in a statement regarding Igbokwe, Hammer promotions. “Our television studios are key growth engines for the company, and Pearlena is ideally suited to lead them. She has extraordinary taste and is well-respected within NBCU, and throughout the global creative community.”

Shell lauded Hammer’s “deep industry experience” and “impeccable creative instincts” as key to her promotion. “I am extremely pleased to be gaining Bonnie as a trusted adviser,” Shell said. “Her 25-plus years of prosocial advocacy will be immensely valuable to me and our company.”

NBCUniversal CEO: PVOD Addresses ‘Very Large’ Non-Theatrical Audience

Universal Pictures’ landmark distribution agreement with the nation’s largest exhibitor AMC Theatres, enabling it to sell and rent digital access to new-release movies in the home entertainment market just 17 days after their box office, debut taps into a largely unserved consumer, according to NBCUniversal CEO Jeff Shell.

Speaking July 30 on the Comcast fiscal call, Shell thanked AMC CEO Adam Aron for “his vision” in working together — rather than against — Universal to create new business model and revenue opportunities for both companies.

“We’ve always believed PVOD can be a complement rather than a replacement for a robust theatrical release,” Shell said, adding that the studio has always believed there’s a growing segment of the population that does not go to the movie theater.

“Over the last couple of years, it’s become more increasingly difficult to generate the same returns over the first couple of windows,” he said. “We believe the new model in the U.S. will restore some of those economics, probably not make more movies, but keep production levels the same as in the past.”

Shell said the advantage to the shortened 17-day box office is that PVOD and transactional VOD marketing can be done in the same window.

“It allows us to tap into that incremental [transactional VOD] revenue stream, share it with AMC and other exhibitors, and at the same time preserve that theatrical window that is so critical to the film business,” he said.

AMC Theatres CEO Doubles Down Banning Universal Movies

AMC Entertainment CEO Adam Aron remains adamant the nation’s largest theatrical chain will not screen Universal Pictures movies when it re-opens — following the coronavirus pandemic shutdown — in select locations on July 15.

The chain and studio have been embroiled in a dispute after NBCUniversal CEO Jeff Shell said Universal theatrical releases going forward would also entertain direct-to-consumer distribution on launch day — thus upending the traditional exclusive 90-day theatrical window. That move came after scuttled theatrical release Trolls World Tour generated $100 million from premium VOD in the home in just three weeks.

In an June 18 interview with CNN Business, Aron was asked if pending Universal sequels such as Fast & Furious 9, Jurassic World: Dominion and Minions: The Rise of Gru would be banned from AMC.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Yes, assuming we can’t have discussions with Universal that solve our concerns,” Aron said. “Remember, AMC has been showing Universal movies happily and profitably for decades. We didn’t change the status quo, and we didn’t actually have any protest about Trolls at all. We understood that our theaters were shut, that they have a business to run, and that they felt they needed to take Trolls to the home rather than waiting.”

Aron says his concern revolves around Universal’s decision to ignore the theatrical window and screen movies in theaters and via home entertainment concurrently.

“If they take movies to the home and theaters at the same time, they’re the ones who are changing the status quo and they would make it unprofitable for us to play Universal movies in our theaters,” Aron said.

The executive said his April letter to Universal Pictures  Chairwoman Donna Langley underscored the fact the studio — not AMC — had broken the business relationship between the two companies, and would force the exhibitor to “come up” with a new business relationship.

“We’re in active dialog with Universal now,” Aron said. “We’ll see where that leads, but it is our current plan not to show Universal movies if we can’t do so profitably.”

Langley in April said the studio “absolutely believe[s]” in the theatrical “experience” and made no statement to the contrary.

“As we stated earlier, going forward, we expect to release future films directly to theaters, as well as on PVOD when that distribution outlet makes sense,” she said. “We look forward to having additional private conversations with our exhibition partners, but are disappointed by this seemingly coordinated attempt from AMC and [National Association of Theatre Owners] to confuse our position and our actions.”

NBCUniversal’s Jeff Shell: ‘Not Realistic’ to Ignore PVOD

After setting off an industry firestorm saying Universal Pictures would pursue a movie-release strategy combining theatrical and premium video-on-demand, NBCUniversal CEO Jeff Shell doubled down on his previous comments to The Wall Street Journal after Universal Pictures animated feature film, Trolls World Tour, generated $100 million in PVOD sales.

Speaking April 29 on the Comcast fiscal call, Shell said PVOD would continue as a “complementary offer” to consumers when theaters re-open to the public — and consumers attend.

He said the Trolls had been primed and marketed for a March 20 theatrical bow, and when the coronavirus shut down theaters, going direct-to-consumer on April 10 with a “desperately” needed children’s title during the pandemic was the only option.

“The majority of our movies, whether we like it or not, are being consumed at home,” Shell said. “It’s not realistic to assume that we’re not going to change, that this part of the business isn’t going to change like all parts of the business are going to change.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The executive said it remains to be seen what the distribution model will look like post-COVID-19. While he expects a gradual return to the cineplex, which he said Universal would be part of, he also expects PVOD to be a part of the business model.

“[PVOD is] not a replacement,” Shell said. “We’re just going to have to see how long [a return to theatrical] takes and where it takes us.”

AMC Theatres, trade group National Association of Theatre Owners and Regal Cinemas have blasted Universal for pledging to bypass the traditional 90-day theatrical window. Both exhibitors have said they would not distribute any Universal — or other studio — title earmarked for simultaneous in-home digital release.

Follow us on Instagram

With the exception of Georgia and Texas, movie theaters in most states remain shuttered due to the coronavirus. The industry and studios are projected to lose billions in box office revenue to the shutdowns.

Comcast CFO Michael Cavanagh said future PVOD releases would be determined on a “title-by-title” basis.

AMC Theatres Threatens to Drop Distribution of Universal Pictures Movies; Studio Responds

The world’s largest movie theater chain is fighting back against NBCUniversal’s plans to release at least some movies simultaneously to theaters and to homes.

On the heels of Universal Pictures’ animated feature film Trolls World Tour generating upwards of $100 million from premium video-on-demand and other digital channels in less than three weeks of release, NBCUniversal CEO Jeff Shell April 28 told The Wall Street Journal the studio would pursue a simultaneous theatrical/home entertainment release strategy going forward.

“The results for Trolls World Tour exceeded our expectations and demonstrated the viability of PVOD,” Shell said. “As soon as theaters reopen, we expect to release movies on both formats.”

AMC Theatres CEO Adam Aron promptly fired off a letter to the studio’s chairwoman, Donna Langley, saying it would no longer screen Universal movies if it turns a cold shoulder to the traditional 90-day theatrical window.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“This radical change by Universal to the business model that currently exists between our two companies represents nothing but downside for us and is categorically unacceptable to AMC Entertainment,” Aron wrote in the letter. “Going forward, AMC will not license any Universal movies in any of our 1,000 theaters globally on these terms.”

AMC’s strategy mirrors exhibitor sentiment that has shunned Netflix original movies since the subscription streaming video behemoth releases its movies concurrently with any theatrical distribution.

Aron, along with 600 AMC executives, has been furloughed as the chain saw its business literally shuttered over night to help curb spread of the coronavirus. He said Shell’s comments suggest Universal is moving away from a long-term business model between AMC and Universal.

Follow us on Instagram

Aron said the chain, which remains largely closed despite governors in select states authorizing the re-opening of theaters, would not distribute Universal — or any other studio’s content — globally if they stray away from the “theaters first” doctrine.

The executive said theatrical releases is a segue for future retail distribution, including boosting publicity, positive word-of-mouth, critical acclaim and downstream revenue. Aron said Universal wants to have its cake and eat it too by combining distribution channels.

“[Universal] assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on how its actions affect us,” Aron said.

He said AMC has invested significant time and energy with Universal executives over the past few years trying to figure out a new distribution models that would be beneficial both parties. Aron has previously mentioned helping studios distribute movies on its website and in theaters — the latter through packaged media.

“AMC is willing to sit down with Universal to discuss different windows strategies and different economic models between your company and ours,” Aron wrote. “However, in the absence of such discussions, and an acceptable conclusion thereto, our decades of incredibly successful business activity together has sadly come to an end.”

Universal Pictures, in a statement, called Aron’s letter disappointing. It said the decision to release Trolls World Tour on PVOD was done to offer consumers sheltering in home an alternative entertainment option.

“Based on the enthusiastic response to the film, we believe we made the right move,” Universal said. “In fact, given the choice of not releasing Trolls World Tour, which would not only have prevented consumers from experiencing the movie but also negatively impacted our partners and employees, the decision was clear.”

The studio said it still believes in the theatrical business model and said it has made no comment to contrary. It said it always seeks to make its movies available to as wide an audience as possible.

“We look forward to having additional private conversations with our exhibition partners, but are disappointed by this seemingly coordinated attempt from AMC and [trade group National Association of Theatre Owners] to confuse our position and our actions,” Universal said.

NBCUniversal Bows $150 Million Employee Fund as CEO Jeff Shell Says He Has the Coronavirus

NBCUniversal has created a $150 million fund for employees, production personnel and amusement staff impacted by the coronavirus pandemic. The announcement by CEO Jeff Shell included his admission to being diagnosed with COVID-19.

“I recently have been feeling under the weather and just learned that I have tested positive for COVID-19,” Shell wrote in a staff memo. “Although the virus has been tough to cope with, I have managed to work remotely in L.A. and am improving every day.”

Shell, who assumed the senior executive position following the retirement of Steve Burke, paid tribute to Larry Edgeworth, an audio technician at NBC News, who passed away due to complications from the virus.

Follow us on Instagram

“Our hearts go out to his family, friends and co-workers,” Shell wrote.

The news comes as NBCUniversal’s marquee primetime event, the 2020 Tokyo Summer Olympics, have been postponed to 2021, resulting in a $1.2 billion ad-revenue hit. The company’s Peacock subscription service remains on schedule to launch in April.

With the delays and postponements, 2021 is shaping up to be a busy year for NBCUniversal, which is opening a new theme park in Beijing, followed by the Tokyo Olympics and 2022 Winter Olympics, the Super Bowl and the 2022 FIFA World Cup in Qatar.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“We will have the return of our tentpole films like F9 and Minions: The Rise Of Gru, and an avalanche of new TV shows,” Shell wrote. “The present may be challenging, but it is impossible not to feel optimistic about the future.”