- If theaters remain closed for the foreseeable future, movie studios will face an unprecedented choice: resort to premium video-on-demand services for blockbuster titles or wait for theaters to reopen.
- A new study by TV tracking app TV Time, which surveyed 6,891 users, suggests that audiences would be willing to pay more for a superhero movie on PVOD platforms than other genres, with the average price among respondents being nearly $15.
- But most digital releases during the coronavirus pandemic have been $20 and it would be difficult for studios to match the profits these blockbusters make at the global box office.
- A more likely scenario is that studios would evaluate releases on a movie-by-movie basis. It's unlikely that "Black Widow" would be released on digital services before theaters, but Disney has experimented with other movies, for instance.
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Theaters across the US have been closed since mid-March and blockbuster movies set for July like Warner Bros.' "Tenet" and Disney's "Mulan" have been pushed to August. With coronavirus cases surging in some states, it's likely that they will be delayed again.
Given the circumstances, movie studios face an unprecedented choice: resort to digital rentals and purchases via premium video-on-demand services (PVOD) or wait for theaters to reopen. Jeff Bock, the Exhibitor Relations senior media analyst, isn't confident about the latter.
"With this current COVID surge, it's obvious to me that most movie theaters won't be opening any time soon," Bock said. "Probably at the earliest fall, but if Broadway is any indication, maybe 2021."
Studios have already experimented with PVOD as an alternative, but mainly with smaller titles like family movies ("Trolls World Tour" and "Scoob!") and comedies or indie fare ("The King of Staten Island"). But if theaters remain closed for the foreseeable future, the pressure would be on to consider PVOD as a more viable option for bigger-budget titles like superhero movies.
A new study provided to Business Insider suggests that audiences would be willing to pay more for those titles than others from the comfort of their own homes.
TV tracking app TV Time surveyed 6,891 respondents who are active users of the app in the US from April 29 to April 30. The results were balanced to account for demographic differences between the US population and TV Time users. Respondents were asked what would be a reasonable amount to pay, between $0 and $50, for a PVOD release in several genres.
The superhero genre, typically the highest grossing at the box office, came out on top with an average amount of $14.17.
Action/adventure and drama followed at $13.49 and $12.38, respectively. Horror ($11.12) and art house movies ($9.45) were the genres respondents said they would pay the least amount of money for.
Below are the average prices respondents said they would pay for each genre:
- Superhero — $14.17
- Action/adventure — $13.49
- Drama — $12.38
- Comedy/Romance — $11.86
- Animation — $11.78
- Live-action family/kids — $11.28
- Horror — $11.12
- Art house — $9.45
Studios are still committed to movie theaters
While respondents were willing to pay nearly $15 for a superhero movie, digital releases are typically $20, which may be a steep price for many at-home consumers. 20% of respondents said they had bought a movie digitally after coronavirus safety guidelines were put in place at the time of the survey in late April.
51% of respondents cited "too expensive" as a reason they had not purchased a digital movie.
It would be difficult for studios to match the profits they make from superhero blockbusters at the global box office with $20 digital releases, let alone $15.
A more likely scenario is that studios would evaluate releases on a movie-by-movie basis. Disney moved "Artemis Fowl," originally set to hit theaters, to Disney Plus and is doing the same with the upcoming "The One and Only Ivan." But it's unlikely that a movie like Marvel and Disney's "Black Widow," which was pushed from May to November, would be released on PVOD services given Marvel's ability to attract audiences to theaters.
A person familiar with Sony's thinking told Business Insider that the studio believes in the traditional theatrical window. Other studios have also recently expressed solidarity with theaters, even Universal, which has been the major studio to be the most aggressive in experimenting with PVOD.
After "Trolls World Tour" debuted on digital platforms in April, NBCUniversal CEO Jeff Shell said that movies would be released on both digital and to theaters once they reopen. AMC Theatres CEO Adam Aron said that Universal's movies would not be shown at AMC venues in the future, prompting Universal to reiterate its commitment to the theatrical experience.
But Shell's comment could offer a preview of what's to come for the relationship between studios and theaters. Not releasing blockbusters to theaters would further anger exhibitors and would be a risk, as blockbuster releases bring in huge profits. But theaters also rely on these blockbusters to stay afloat. So it's hard to believe Universal and AMC wouldn't reach a compromise, as Universal will release sure-thing blockbusters next year like "Fast and Furious 9" and "Jurassic World: Dominion." Whatever course studios choose for PVOD will likely be temporary.
"PVOD has been and will remain part of the conversation so long as theaters aren't up and running, but it remains a worst-case scenario for the vast majority of high-profile releases," said Shawn Robbins, the Box Office Pro chief analyst. "Tentpoles, and the studios that depend on them, simply cannot thrive financially without the theatrical window."
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