Warner’s ‘Scoob!’ Fiscal Results: It’s a Waiting Game

This much is certain: Warner Bros.’ PVOD release Scoob! was a big hit on major digital transaction charts.

In its first three days of availability, the erstwhile animated theatrical release, issued May 15 for rental or purchase at a premium price, finished atop the FandangoNow, iTunes, Google Play and Amazon Prime charts.

The movie also featured prominently as the first “theater at home” releases available on Vudu and Comcast’s Xfinity Movie Premiere.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The title, which bypassed theatrical distribution when exhibitors shuttered in March due to the coronavirus, is available to rent for $19.99, and to purchase for $24.99.

How much Scoob! has generated in revenue is anyone’s guess. That’s because unlike the traditional weekend box office tally, digital rental/retail industry numbers and how to market them during a pandemic remains a work in progress.

Universal Pictures set the bar high last month when it revealed to much media attention that its animated Trolls World Tour sequel generated $100 million in digital revenue after three weeks. Unless Scoob! tops that tally sooner, it’s a waiting game when Warner will make a fiscal announcement — if at all.

Follow us on Instagram

In the meantime, Trolls World Tour continues to resonate with cinema-starved consumers stuck at home with children. The feature remains near the top podium on most charts except iTunes. Newcomer Capone, from Vertical and starring Tom Hardy as the cigar-chomping title gangster, has resonated with consumers on FandangoNow and iTunes in the No. 4 position.

Early digital release holdovers, including Sony Pictures’ Bad Boys for Life, Bloodshot and Fantasy Island; Universal’s The Invisible Man; Paramount’s Sonic the Hedgehog; and Warner’s Birds of Prey continue to sell — albeit at reduced price points.

Indeed, Bloodshot is the No. 1 seller on Charter Spectrum, while Lionsgate’s Arkansas ranks sixth. Knives Out (Lionsgate) sits in eighth on Amazon Prime.

Disney has refused to play the PVOD game, opting instead to move some theatrical releases to Disney+ or delay box office debuts until the COVID-19 dust settles. To fill the void, Disney has pushed catalog titles, including Fox’s The Greatest Showman (No. 5 on Amazon) and Tombstone (No. 7 on iTunes).

And then there’s the elephant in the room: Netflix. With the largest SVOD subscriber base in the U.S. and worldwide, new original movie release The Wrong Missy, from Adam Sandler’s Happy Madison Productions, and starring David Spade and Lauren Lapkus, ranks No. 1 on the streamer’s U.S. chart. Netflix ended the most recent fiscal period with 70 million domestic subs.

Warner Sticking With Theatrical Window — For Now

After Universal Pictures set off an industry firestorm announcing it would pursue simultaneous theatrical/PVOD distribution for new movies, the CFO of Warner Bros. parent AT&T told an investor event the studio is sticking with the 90-day theatrical window for now.

Speaking online May 12 on the virtual MoffettNathanson 7th Annual Media & Communications Summit, John Stephens sought to quell any notion Warner Bros. would upend industry norms as the movie theaters remain shuttered due to the coronavirus pandemic.

That said, the studio on May 15 will launch its first skipped theatrical/PVOD release with Scoob!. The movie becomes the second major animated family film after Universal Pictures’ Trolls World Tour to bypass theatrical release in favor of digital release. Trolls World Tour reportedly generated $100 million through VOD, the digital equivalent of rental. Scoob! will be available either as a digital rental or purchase.

“We’ll learn from [Scoob!],” Stephens said. “We’re interested in new ideas, whatever’s good for consumers, but we’ll continue to work with our [exhibition] partners.”

Major exhibitors such as AMC Theatres and Regal Cinemas have vowed not to screen any theatrical movie concurrently available to digital channels at launch.

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.

Merchandising: Retailers Playing ‘Mortal Kombat’ as ‘Trolls World Tour’ Pre-Orders Begin

A couple of retailers offered exclusives for Warner’s new animated movie Mortal Kombat Legends: Scorpion’s Revenge that arrived on disc April 28.

Best Buy’s ‘Mortal Kombat Legends: Scorpion’s Revenge’ with figurine

Target offered the Blu-ray/DVD combo pack of the film with exclusive Steelbook packaging for $19.99

Best Buy had the 4K Ultra HD Blu-ray as a limited-edition gift set with a Scorpion figurine for $29.99.

Among other deals, Walmart was selling a $19.96 bundle from Paramount containing digital versions of both Sonic the Hedgehog and Monster Trucks, redeemable through Vudu.

Best Buy offered a promotion giving shoppers a free 4K Ultra HD Blu-ray movie from a select list with the purchase of the $249.99 Panasonic UB420 4K Blu-ray player. The available 4K movies include Avengers: Endgame, Aquaman, 1917, Dunkirk, Ford v Ferrari, Jumanji: The Next Level, The Lion King, Joker and more.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Target is taking preorders for Universal’s Trolls World Tour Blu-ray and is offering a $26.99 limited-edition that includes an “Art of Trolls” filmmaker gallery booklet. No street date for the film has been announced yet.

Academy Temporarily Waives Theatrical Requirement for Oscars Eligibility of 2020 Films

The Academy of Motion Picture Arts and Sciences April 28 announced that, as a result of the coronavirus pandemic, it is waiving the requirement that films screen in theaters to be eligible for Oscars consideration at the 93rd Academy Awards.

Typically, films are required to be shown in a commercial motion picture theater in Los Angeles County for at least seven consecutive days, with at least three screenings per day, to qualify for Oscars consideration. However, due to the coronavirus all L.A. theaters have been shut down since March. As a result, the Academy declared that films intended for a theatrical run that instead debuted on a streaming platform or VOD service would still be considered for nomination in the Best Picture, general entry and specialty categories for the 93rd Academy Awards to be held Feb. 28, 2021.

The special dispensation will apply to this awards year only, according to the rules approved by the Academy’s Board of Governors, and only while theaters remain closed.

The film must still be made available on the secure Academy Screening Room member-only streaming site within 60 days of the film’s streaming or VOD release, and the film must meet all other eligibility requirements.

Follow us on Instagram

This is good news for films such as Universal’s Trolls World Tour and Warner’s Scoob!, which skipped theatrical runs in favor of a direct-to-VOD premiere, but can now still be considered for awards such as Best Animated Feature.

The Academy further specified that the exemption would be removed once theaters reopen in accordance with government-approved guidelines, at which point standard theatrical qualifications would again apply.

As such, with theaters looking to re-open by the end of summer, Netflix would still need to stage a token theatrical run for its year-end original movies to qualify them for the awards.

“The Academy firmly believes there is no greater way to experience the magic of movies than to see them in a theater. Our commitment to that is unchanged and unwavering,” Academy president David Rubin and CEO Dawn Hudson said in a statement. “Nonetheless, the historically tragic COVID-19 pandemic necessitates this temporary exception to our awards eligibility rules. The Academy supports our members and colleagues during this time of uncertainty.  We recognize the importance of their work being seen and also celebrated, especially now, when audiences appreciate movies more than ever.”

For films to more easily meet theatrical exhibition requirements when theaters reopen, the Academy will expand the number of qualifying theaters beyond Los Angeles County to include venues in additional U.S. metropolitan areas, including New York City, Chicago, Miami, Atlanta and the San Francisco Bay Area.

Film festivals that have been impacted by the pandemic may provide films online through either a transactional pay wall or password-protected entry, which will not affect the films’ eligibility for future Academy Awards qualification. The Academy will allow an exemption for those films that are released online through an impacted festival’s online platform, provided that proof of inclusion in the festival is submitted.  With these provisions, films will be expected to comply with all other eligibility requirements for the 93rd Academy Awards.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The Board of Governors also announced rules changes in the Sound, Music and International Feature Film categories. The separate Sound Mixing and Sound Editing will be combined into a single Achievement in Sound award going forward; music scores must comprise a minimum of 60% original music, with sequels and franchise films requiring 80% originality; and all eligible Academy members will now be invited to participate in the preliminary round of voting for Best International Feature Film.

In addition, the Academy announced that the 93rd Awards season will be the final year DVD screeners will be distributed. Citing environmental concerns, the Academy will mandate digital screeners for 2021 films and beyond, covering the 94th Academy Awards and after. The distribution of physical music CDs, screenplays and hardcopy mailings, including but not limited to paper invites and screening schedules, also will be discontinued.

Universal: ‘Trolls World Tour’ Generated $100 Million in Digital Revenue

Universal Pictures reportedly has generated almost $100 million in revenue from the animated movie Trolls World Tour since its April 10 release on premium VOD for $19.99.

The Wall Street Journal, citing Universal’s corporate communications, said the studio generated another $60 million from the combined transactional VOD releases of The Invisible Man, The Hunt, Emma and Never Rarely Sometimes Always.

Universal Pictures sources later confirmed both figures to Media Play News — and noted that they are domestic (United States and Canada) only. The film will be released theatrically in most international markets in the fall.

“The results from Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD,” NBCUniversal CEO Jeff Shell told The Wall Street Journal. “As soon as theaters reopen, we expect to release movies on both formats.”

Follow us on Instagram

Universal April 27 announced it is releasing previous Judd Apatow theatrical title The King of Staten Island, about and starring “Saturday Night Live” cast member Peter Davidson, on June 12 on PVOD.

Trolls World Tour, the sequel to Trolls, was originally intended to premiere in movie theaters April 10.

But with movie theaters shuttered in the wake of the March 11 declaration by the World Health Organization (WHO) of a global coronavirus pandemic, the film instead was released directly to premium VOD at a $19.99 rental price for 48 hours.

The film was also released to about 25 drive-in movie theaters on that same day, a Universal Pictures spokesperson told Media Play News — where it reportedly generated another $100,000 in total revenue.

The sequel, featuring the voices of Anna Kendrick, Justin Timberlake, Rachel Bloom, James Cordon and Kelly Clarkson, among others, was widely seen as a test case for PVOD.

Richard Greenfield, co-founder/analyst with Lightshed Partners, discussed the move to digital delivery on CNBC’s “Squawk Box” April 9, the day before the film’s release.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“It’s a pretty monumental day in the film industry where a mainstream consumer movie in Trolls is going to skip the theaters,” he said. “I give [NBCUniversal CEO] Jeff Shell and the team at Universal Pictures a lot of credit for being willing to try this. It’s a unique circumstance. A lot of the marketing dollars had already been set in motion for Trolls, but you got kids stuck at home, families stuck at home — $20 for Trolls, direct-to-consumer … is really interesting. I’m certainly rooting for them to do well because I think this is an important model for the industry.”

PVOD’s Brief Moment in the Sun

The novel coronavirus pandemic has given movie studios a taste of something they’ve always wanted: premium video-on-demand, or PVOD.

Long talked about as the antidote to shrinking film profits, PVOD allows consumers to watch big movies at home on the same day as their theatrical release — at a premium price, of course. Three years ago, a Morgan Stanley Research report looked at the viability of PVOD and found “significant upside for film studios,” according to the report’s lead author, Benjamin Swinburne. Swinburne and his team estimated that PVOD could boost studios revenues by as much as $2 billion a year, with hardly any extra costs.

PVOD talk died down a short time later when theater owners made it perfectly clear they were not on board.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Then came the pandemic. All of a sudden, the country was effectively shut down. The big movie theater chains at first said they would remain open, but sell fewer seats to maintain social distancing. But within days, both AMC and Regal Cinemas, the No. 1 and No. 2 theater chains, went dark.

Productions were halted and, for films already in the can, premieres were canceled and theatrical openings delayed. On March 16, Universal Pictures announced its current theatrical slate would be available for home viewing at a premium rental rate of $19.99 — and that it would release DreamWorks Animation’s Trolls World Tour digitally on the same day as its scheduled theatrical debut, also at $19.99.

Other studios quickly followed suit, smashing the traditional 90-day theatrical window with a wide range of movies — including Disney’s Onward, which was released digitally on March 20, two weeks after its theatrical opening, and Sony Pictures’ Bloodshot, released to home audiences just 11 days after its box office debut.

But now that studios have gotten a taste of PVOD, they have been conspicuously silent about its success — and about its future.

That’s because studios need movie theaters as much as theaters need Hollywood movies. Simply put, one cannot survive without the other — which is why studios are treading carefully with PVOD. As the Morgan Stanley study found, there’s a significant upside to releasing movies early through digital channels. But $2 billion is a fraction of the estimated $22.5 billion studios earned globally from theatrical ticket sales.

Regardless of how well studios do with PVOD during the pandemic, once theaters reopen the genie will be put back into the bottle — with PVOD’s ultimate fate still dependent on theater owners, whose opposition to PVOD stems in large part to the fact that they derive 40% of their profits from concessions.

Studios, however, will have a little more leverage when the crisis is over. In a survey of 1,000 U.S. consumers, Performance Research found that 49% of respondents said it would take “a few months” to “possibly never” for them to return to movie theaters, while just 15% said they intend to frequent movie theaters more often after the pandemic is over. As Variety observed, “the net effect suggests an alarming erosion of theatrical returns that exhibitors and studios alike can ill afford.”

‘Trolls World Tour’ PVOD Release No. 1 on iTunes, Amazon Video

Universal Pictures/DreamWorks Animation’s groundbreaking PVOD release of Trolls World Tour topped digital charts, including No. 1 on iTunes, Amazon Video and Redbox On Demand, among others (through April 12), following its April 10 launch. Financial results have not been released.

The sequel to the 2016 original Trolls movie was released on PVOD for $19.99 on the same day it had been scheduled to debut in theaters prior to the coronavirus pandemic.

With movie theaters shuttered globally to reduce the spread of the virus, studios have either postponed launch dates for tentpole titles or expedited a movie’s retail distribution, including Universal’s The Invisible Man, Paramount Pictures’ Sonic the Hedgehog and Sony Pictures’ Bloodshot, among others.

Disney has said it would debut Artemis Fowl on its branded subscription streaming video platform — the first of several other undisclosed titles.

Follow us on Instagram

“The measures being taken right now are because of the unforeseen circumstances,” Paul Dergarabedian, senior media analyst with Comscore, told Business Insider. “And consumers have an appetite for new content. We are literally stuck at home.”

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, doubts PVOD has much of a long-term shelf life. He says studios cannot recoup production/marketing costs of big-budget movies for $20 to households.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“One off and unsustainable,” Pachter said in an email. “We have been trained to wait for $5.99 digital rental. [Studios] will scrap the idea once the pandemic is behind us.”