'Troll' Sequel Earns More Without Theatrical Release... Is The Film Industry Landscape Changing?

Universal Studios Earns $80 Million from PVOD Distribution
Domestically Released Today Simultaneously on Megabox and VOD... CGV and Lotte Say "Existing Order is Collapsing"

Movie 'Troll: World Tour' Still Cut

[Asia Economy Reporter Lee Jong-gil] The landscape of the film industry is changing due to the spread of the novel coronavirus infection (COVID-19). The movie "Troll: World Tour" generated over $100 million (approximately 121.8 billion KRW) in revenue without a theatrical release. This clearly demonstrated the potential of an online distribution strategy.

According to the U.S. financial media CNBC on the 28th (local time), Universal Studios Animation's "Troll: World Tour" recorded about $100 million in sales three weeks after its release on an online video platform on the 10th. Initially, Universal Studios planned to release the film in theaters first. However, as movie theaters closed due to the spread of COVID-19, it was released online according to the scheduled release date. The digital rental fee was set at $19.99, the price for premium video on demand (PVOD).

As a result, "Troll: World Tour" brought Universal Studios more revenue than its predecessor "Troll." According to Box Office Mojo, "Troll" was released on October 13, 2016, and earned $153,707,064 (approximately 187.2 billion KRW) in theaters over five months. Generally, box office revenue is split evenly between theater chains and production companies. DreamWorks Pictures, which handled distribution at the time, took about $76.85 million (approximately 93.6 billion KRW). Universal Studios earned about $80 million (approximately 97.4 billion KRW) from "Troll: World Tour," taking 80% of the digital rental fees.

Jeff Shell, CEO of NBCUniversal, the parent company of Universal Studios, told The Wall Street Journal (WSJ), "'Troll: World Tour' exceeded our expectations and showed the potential of PVOD." He added, "When theaters reopen after the COVID-19 situation settles, we expect to release films in both theatrical and PVOD formats."

The National Association of Theatre Owners (NATO) strongly opposed this. In a statement released that day, they emphasized, "The success of 'Troll: World Tour' should not be interpreted as a new standard." AMC, the largest theater chain in the U.S., went further and declared a boycott of Universal Studios films. Adam Aron, CEO of AMC, said, "'Troll: World Tour' going straight to homes is an exception," and added, "There is no other choice but to respond to Universal's unilateral actions. We will not screen Universal films in any theaters in the U.S. or Europe."

The strong response from the theater industry stems from concerns that the traditional film distribution ecosystem could be disrupted. The situation in South Korea is no different. CGV and Lotte Cinema refused to screen "Troll: World Tour" on the 8th, citing Universal Studios' plan to simultaneously release the film in theaters and on video on demand (VOD). Both companies stated, "Our internal policy is not to release films that are simultaneously released in theaters and the secondary rights market."

[Image source=Yonhap News]

Films screened domestically typically have a grace period of 2 to 3 weeks before being released in the secondary rights market. CGV and Lotte Cinema have strictly excluded films that deviate from this framework, including Netflix films. They did not accept even if the grace period was extended to eight days. The special situation of COVID-19 was no exception. At the time, a related official said, "It is difficult to acquire content by breaking the existing order." Another official expressed concern, saying, "Films must compete on the same level as regular films. Otherwise, it could cause confusion in the film ecosystem."

As a result, "Troll: World Tour" will be released today (29th) only at Megabox among the three multiplex chains. This company first opened its doors to a Netflix film ("The King: Henry 5") in October last year. At that time, they went through a coordination process, including extending the grace period by a week, but this time they accepted Universal Studios' request as is. A related official said, "Since this decision was made by Universal Studios headquarters considering the COVID-19 situation, there was no room for negotiation," and added, "It will broaden customers' movie-watching options and serve as an opportunity to attempt new internal initiatives."

This content was produced with the assistance of AI translation services.