Universal Touts Success of Allowing Viewers to Rent, Buy Movies that Are Still in Theaters
The COVID-19 pandemic caused innovation by necessity all over the entertainment industry. Many movie producers performed radical experiments with how they released their films, and some — such as WarnerMedia — decided to simply release their entire slate of new films directly to subscription streaming services.
The furor kicked up by that decision helped to somewhat overshadow a less impactful, but still controversial policy shift by Universal Studios. In 2020, Universal decided to start offering its new theatrical releases on digital purchase and rental platforms much sooner than the traditional 90-day window dictated, boosting the price to allow users to stream movies from home that were still in theaters.
The industry term for allowing home viewers to rent or purchase a movie that is still in theaters is premium video-on-demand (PVOD), and most theater owners and studios recoiled in horror at the prospect three years ago. But now, most studios offer some sort PVOD for major films, and according to reporting from The New York Times, a move that was once viewed as risky is paying off handsomely for Universal.
In less than three years, Universal has generated more than $1 billion in PVOD revenue. Movies like “Minions: The Rise of Gru,” “Cocaine Bear,” and “M3GAN” have become available on platforms like iTunes and Prime Video as few as 17 days after their original release, at a price point of $25 to rent or $30 to buy. This is leading to meaningful cash infusions for Universal; “The Super Mario Bros. Movie” has brought in more than $75 million in PVOD revenue since it was released on May 16.
Interestingly, PVOD has had a relatively small impact on the traditional transactional video-on-demand (TVOD) performance of these films. The TVOD window occurs after films have left theaters, but are still available to rent or purchase on digital platforms for much lower prices than the premium window; this often begins before the movies arrive on a streaming service, but continues in conjunction afterward. Chairman of Universal Filmed Entertainment Group Donna Langley says that this demonstrates Universal has found a new customer segment that wants to watch the newest releases from home right away and is willing to pay for the privilege.
It’s less clear what effects Universal’s PVOD strategies have had on NBCUniversal’s streaming service Peacock, which holds the Pay-1 rights to Universal films. Parrot Analytics director of strategy Julia Alexander called the impact on Peacock “notable,” but said it isn’t as large as people might have thought. Peacock more than doubled its paid subscriber count in 2022, and attributed much of the success to the ability to stream Universal movies on the service.
Disney attempted a similar program during the COVID pandemic, rolling out what it called “Premier Access” in 2020. Much like PVOD, it allowed users to see films still in theaters for $30. However, Disney did not make the films available on platforms that didn’t require a subscription; users had to sign up for Disney+, then pay an additional fee to stream the new film. That didn’t sit well with subscribers, many of whom felt there was no point in paying for a subscription if it was to be accompanied by such sizable rental costs for new movies.
Fans who prefer to stream Universal movies on Peacock may not be as happy with the studio’s PVOD program, but it doesn’t appear likely to shut down in the near future. Universal is seeing it pay big dividends, and it gives customers more choices for watching blockbuster movies at whichever venue they prefer, home or theater.
Peacock
Peacock is a subscription video streaming service from NBCUniversal that includes original shows, blockbuster movies, and classic television series. Peacock is home to “Yellowstone,” and “The Office,” as well as original hits like “Poker Face” and “Bel-Air.” You can also watch live sports including NFL, MLB, WWE, Olympics, Premier League, NASCAR, French Open, College Football and Basketball, and PGA Tour. Premium Plus subscribers can stream their local NBC feed in all 210 markets.