Trolls World Tour’s digital success isn’t going to kill cinemas

Trolls are the monsters hanging over cinema chains, at least in the minds of some financial hawks.

With the coronavirus pandemic having shuttered theatres, Universal pitched the sugar-coated sequel Trolls World Tour straight into the video-on-demand market with a £15.99 price tag (UK), $20 in the US.

Cinema at home appears to have worked for it. The title reportedly scored the biggest opening day and weekend for a digital release, a No 1 slot on Amazon, and a lot of speculation about the gross. Unfortunately, there isn’t yet a reliable means of calculating that for such a release.

But the reports were enough to feed into a grim assessment of movie theatres’ prospects released by Fitch, the credit ratings agency. “Coronavirus threatens US cinema business model, default risk rises,” it warned.

Odeon/UCI owner AMC was identified as the weakest link, thanks to its substantial debt pile, although that didn’t stop it from subsequently raising $500m to keep it going at a time when its revenue line is basically zero.

Are the cine-sceptics right? Was Fitch correct to voice concerns about other studios following Universal’s lead, and the threat posed to the chains’ beloved 90-day window of exclusivity if they do that?

I think not.

Trolls World Tour was a unique property, at a unique time.

The $90m picture had initially seen its scheduled theatrical release brought forward, only to see them closing. So Universal turned on a dime, throwing the film into the perfect market of locked-down families during the extended Easter weekend. It might look expensive for a rental, but not if you tot up the cost of going to a movie theatre. The price point seems to have worked just fine for those in need of something to keep the little darlings occupied.

A few other cinema releases, such as The Hunt and The Invisible Man, that had already been seen in theatres, have also also hurried out on to digital platforms at a similar level.

But most of the big releases have simply been put back, even if that means studios taking a hit from marketing costs that may have to be duplicated.

Speculation in one or two places of digital releases for films like Disney’s live action Mulan, even Warner’s Wonder Woman 1984, has proved wide of the mark.

Even with the rising popularity of streaming, the production and marketing costs of a big-budget movie are still much easier to recoup via a theatrical release. Trolls World Tour wasn’t that, with its mid-range budget, lower than the franchise’s first outing, reflective of the decline faced by many animated sequels (Disney’s properties being the exception).

There’s a different dynamic at work with art house releases, and some of them may have secured some much needed extra eyeballs through being made available through channels such as Curzon Home Cinema. More power to them.

But what those fretting about cinemas do seem to be missing is that how much the desire to get out could encourage people back through their doors when lockdowns are eased. And there should be an embarrassment of riches when that happens in terms of the big-ticket releases on which the big chains rely on.

The complication, the twist in the plot, will be the need to enforce a level of social distancing, as part of the gradual reopening of western economies that seems likely.

That phrase may be with us for longer than people expect. And will people want to buy popcorn at £10 a go, given the way it’s prepared? Packaged sweets may do better.

Finding a way to make theatres work with a new reality should, nonetheless, not be beyond the wit of their chief executives, who were more than amply rewarded for sitting back and counting the money prior to the current crisis.

It will be on them to prove that concerns about their business’s long-term future are misplaced. If they can, maybe they’ll be worth the movie star salary packages they’re a mite too fond of.