Universal says its on-demand movie strategy has increased its audience

Revenue from premium VOD is small compared to box office sales. But it’s certainly not nothing.

“The Super Mario Bros. Movie” has generated more than $75 million in premium VOD revenue since May 16, according to Universal. “Jurassic World: Dominion”, “The Croods: A New Age” and “Sing 2” each grossed more than $50 million. Universal said 14 films, including “News of the World,” a historical drama starring Tom Hanks, and “M3gan,” each grossed more than $25 million.

Focus films, including ‘Belfast’ and ‘Mrs. Harris Goes to Paris’, each grossed approximately $5 million. For some art films, a theatrical release has become especially valuable as “a marketing tool” for premium VOD rentals and purchases, according to Julia Alexander, the director of strategy at Parrot Analytics, a research firm.

Much like DVD sales in the 1990s and 2000s, premium VOD has begun to provide a kind of financial safety net for missed checkouts. “Especially the Focus titles,” said Peter Levinsohn, director of distribution for the Universal Filmed Entertainment Group. “Those smaller movies aimed at older moviegoers have become dependent on it, I wouldn’t say, but they’ve benefited tremendously from it.”

It’s also about flexibility, Mr. Levinsohn said. The studio often decides that 17 days (three weekends) of theatrical exclusivity is enough. Sometimes, based on ticket sales, it allows longer. “The Super Mario Bros. Movie” ran exclusively in theaters for 41 days.

“We’ve also taken control of deciding when to make our content available in the home, based on the most optimal timing for an individual film,” said Mr. Levinsohn. NBCUniversal said in January that its studio revenues (both film and TV) are up 23 percent in 2022 to $11.6 billion from a year earlier.

Every studio has tried to find creative ways to maximize movie profits in a fast-paced industry. Part of Universal’s challenge is guessing what kind of impact premium VOD might have on streaming: if movies are sold or rented more widely before they arrive on a streaming service (in Universal’s case, on Peacock and Netflix) , will the films become less valuable? tools to encourage people to sign up for streaming services?

“The impact on streaming isn’t as big as people might have expected, but it’s still remarkable,” Ms Alexander said.