New Universal Movies Will Be Released Online Due to COVID-19
Universal Pictures are releasing films online alongside their theater release due to COVID-19
Universal Pictures are making their new films available for online streaming in addition to their theater releases. The film studio giant made the decision as a response to the outbreak of COVID-19, which has forced thousands of theaters worldwide to shut down.
The impact of COVID-19 has been felt far and wide in many industries, with many film studios looking to adapt to the new conditions that have been set by the virus which is likely to stick around for a while.
Theater releases are usually the main source of revenue for film studios, while home release formats such as DVD and Blu-Ray releases also make up a sizable percentage of studio revenue.
Universal pictures is the oldest film studio in America, and regularly competes with other studio powerhouses such as Disney and Warner Bros. However, all studios are suffering due to the spread of COVID-19.
Plummeting box office sales
US box office sales are currently at a 20-year low, and aren’t going to pick up until the current crisis is resolved. Movie theaters around the globe have been shutting down and/or going bankrupt due to low ticket sales, which are unable to offset their high operation costs.
The recent Coronavirus pandemic has halted filming and production activities for hundreds of films worldwide, so film studios are scrambling to use every option at their disposal to pull in revenue from their finished projects.
Streaming services boom
While box office sales may have plummeted, streaming services are seeing a boom in activity as of late. Netflix’s streaming service has become so popular during home-isolation and quarantine that their servers were overwhelmed by the uptick in demand from viewers.
With such a spike in demand for home streaming, it’s no wonder than Universal Pictures are looking to get in on the action.
Disney also has their own home streaming service called Disney+. The company can divert their resources into this streaming service during the pandemic to minimize their box office losses.
Online film rentals
Universal Pictures also have their own streaming service called Peacock which is scheduled to launch in July, but are choosing to release their new films for online rental through iTunes and Amazon Video Prime before its launch.
They have released their current line up of films including The Invisible Man, The Hunt, and Trolls World Tour for online rental. Their rental services charge users $20 and allows them to rent each film digitally for 48 hours.
Their decision was likely influenced by the decision of other major studios to delay the releases of upcoming blockbuster films such as James Bonds’ No Time To Die and Disney’s live-action adaptation of Mulan due to COVID-19.
This rental strategy is quite different from the usual scenario where studios play a film in theaters for up to 3 months before it is given an official home release on DVD, Blu-Ray or streaming services.
This 3 month window is when film studios make the bulk of their film revenue, so they are likely still losing out on potential box office revenue by switching to rental services this soon.
Prior to their decision to release films for digital rental, Universal Pictures were considering delaying the release of many of their films until the coronavirus epidemic was resolved. However, the release of some blockbuster films has still been postponed due to their box office potential from theater release.
Universal Pictures delayed the release of the latest entry in their Fast and Furious franchise F9 by a full year due to the massive revenue it is likely to pull in at theaters compared to home streaming or rental services.
The stakes are far lower for their other films such as The Hunt or Trolls World Tour, so Universal chose to release them for early rental.
The digital rental format could prove to be popular if it becomes a norm during the COVID-19 lockdown and quarantine. Many film fans tend to avoid going to the theaters due to crowds and would rather wait 3 months for films to be released on DVD or Blu-Ray before watching them. This segment of film fans could be the ones to popularize digital rental of new films.
The end of movie theaters?
The biggest losers in these situations are still movie theaters. Movie theaters have incredibly high operation costs, which they often have to offset with food and drink sales. The current box office downturn could signal the end for many popular theaters around the world who may not be able to hold out until the coronavirus crisis is resolved.
AMC theaters may be filing for bankruptcy in the coming months due to theater closures. AMC is the biggest movie theater chain in the world, and has been hit hardest by the pandemic. It is currently losing about $155 million in revenue per month due to these closures.
Will other studios follow Universal’s decision?
Many other studios will be observing the results of Universal Pictures’ decision to release their new films for online rental. If things work out in Universals’ favour, it will be remembered as an early adopter of a successful film release format that saves movie studios during this epidemic.
It would seem many studios are simply throwing everything they have at the wall and seeing what sticks. These are desperate times with lots of jobs on the line, so these companies have to find innovative ways of stopping their ships from sinking.
Digital streaming services are going to likely continue growing in popularity in the future. These services will shape the media distribution landscape and become a mainstay in the film industry.
It took many film studios a long time to view digital streaming services as a viable source of revenue, so early digital film releases may be the next trend that they latch onto in the coming years.