Universal VOD Offerings Will Be "A Complementary Element" To Theatrical Releases

NBCUniversal has been shaking things up in the film industry this week by admitting that premium VOD releases would be part of their future release strategy even after movie theaters are open for business again. In response, AMC Theatres said they would ban Universal Pictures movies from playing in their multiplexes, and Regal Cinemas said they would not play any movies that break the standard theatrical window. Now NBCUniversal Jeff Shell has offered some clarification on Universal movies theatrical release strategy, where he considered premium VOD to be "a complementary element" to the theatrical model.

In an NBCUniversal earnings call (via The Los Angeles Times), CEO Jeff Shell reaffirmed what he said earlier this week following the successful at-home PVOD release of Trolls World Tour, but he also added that they're not looking to replace the theatrical release model Universal Pictures has followed for decades now. Essentially, he's making decisions based on the current situation with the pandemic and realizing that the future of theatrical distribution will be much different even once movie theaters are back to business as usual. Shell said:

"The question is when we come out of this, what is going to be the model. I would expect that consumers will return to the theaters and we will be part of that. And I also expect that PVOD is going to be a part of that in some way. It's not a replacement, it's going to be a complementary element. We're just going to have to see how long that takes and where it takes us."

That's a much more forward-thinking, self-aware stance than movie theaters have by planting their feet in the ground and refusing to change with the transforming landscape of film distribution. The fact is that there aren't any movie theater chains open to play new releases right now. Studios need to earn money off their finished products intended for spring and summer theatrical release somehow so they can keep making movies intended for a later release date. That means they need to release movies somehow, a premium VOD release was the best option when it came to Trolls World Tour, and it worked very well for them.

But Shell isn't trying to hurt movie theaters in any way or make them insignificant. Universal still has plenty of movies they want to release on the big screen. Universal's support for premium VOD releases is a product of the times, and they recognize that in the coming months, there are still movies that won't be profitable enough to wait for a theatrical release, and will end up earning more money through premium VOD. Shell added:

"There's no question that theatrical will some day be a central element to our business and film business, it's how people make their movies and how they expect their movies to be seen. But the flip side is the majority of our movies, whether we like it or not, are being consumed at home, 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."

Do movie theater chains like AMC Theatres really think they can do without the future revenue of Universal's eventual theatrical release of Jurassic World: Dominion? They were just on the verge of bankruptcy, and there's no clear indication of when they'll have regular theatrical releases to show again, so maybe they should tone down the aggression a little bit.

At the end of the day, movie theater chains and their owners need to realize that VOD movies are getting more and more popular as audiences choose to stay home instead of making an expensive trip to movie theaters. What theaters need to focus on, instead of the incessant whining about theatrical windows and mafia-style threats to studios, is enhancing the theatrical experience and making the high cost of admission and concessions actually worth the price so people want to come back as soon, and as often, as possible.

As for Universal, we can't help but applaud their adapting to the current environment. After all, even though they released Trolls World Tour on premium VOD, they're still holding back major releases like F9 and Minions: The Rise of Gru until 2021. So Universal isn't planning on overhauling the entire theatrical business model – they're just going with the flow.