Aug 11, 2020 - Economy

Video rentals rise as theater windows shrink

Data: PwC and Digital TV Research; Chart: Axios Visuals
Data: PwC and Digital TV Research; Chart: Axios Visuals

The coronavirus pandemic has accelerated a trend of studios pushing more movies to be made available for a premium rental price via a ticketed on-demand deal.

What they're saying: "With film fans spending more time at home, we have seen steady growth on both our FandangoNOW and Vudu platforms,” says Fandango Home Entertainment Vice President Cameron Douglas.

Why it matters: It's a blow to movie exhibitors across the country that were relying on big hits to come exclusively to theaters before being made available to consumers at home.

Driving the news: Disney announced on Tuesday that its most highly-anticipated blockbuster of the year, the live-action remake of "Mulan," is heading to Disney+ on Sept. 4 for consumers to purchase for a premium access fee of $29.99.

  • The movie's theatrical debut had previously been delayed four times.

Between the lines: This is Disney's first time experimenting with offering a movie via a premium access price on its streaming service.

  • Disney executives say this could create a new revenue stream in the form of ticketed videos on-demand (TVOD) — similar to Fandango or Moviefone.

Be smart: Analysts were expecting Disney to rake in $1 billion off the "Mulan" global theatrical debut.

  • It's unlikely Disney will hit that number by pushing the movie to premium on-demand streaming, but the company likely sees the potential for "Mulan" to help bring in Disney+ subscribers as a worthwhile tradeoff.

The big picture: Disney's move into premium on-demand streaming follows similar efforts by rival movie studio Universal, which is owned by Comcast.

  • Universal was the first studio to skip the theatrical window altogether during the pandemic, when it made "Trolls World Tour" and other titles available on-demand for 48-hour rental for $19.99 at the same time as the film debuted in theaters in April.

By the numbers: Data from market research company Parks Associates finds that in Q1 2020, 14% of US broadband households had used a TVOD service over the past 30 days, a five-point increase from the previous year.

  • It predicts consumer usage of TVOD services will increase significantly in 2020 due to the pandemic.
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