With theaters largely closed due to COVID-19 nationwide (except for a handful of drive-ins), there are many things that make sense financially for major studios when it comes to the distribution of their movies right now.

It made sense that current theatrical releases such as Bloodshot, The Invisible Man, The Hunt, Onward, etc. would quickly go into homes via VOD, EST purchase or streaming.

It also makes sense for some low- and mid-budget movies that might have struggled in a normal theatrical marketplace — i.e. Paramount/MRC’s comedy The Lovebirds, STX’s family action pic My Spy and Disney’s Artemis Fowl — to skip cinemas and head straight into homes. Given how they’re non-events on paper, a home release could be the best destination for such titles, forgoing potential marketing costs and losses.

However, when Universal decided that its $90M DreamWorks Animation sequel Trolls World Tour would go both theatrical and VOD rental (48 hours for $19.99) over Easter weekend, instead of being re-scheduled like a bulk of their other future theatrical releases, the decision not only raised eyebrows but received a big grumble from theater owners. That said, exhibitors are not in the position to argue with Universal at this moment; their greatest worry being whether they open in early June or not.

According to Deadline sources, the Trolls franchise (in lifetime consumer products, global TV licenses, home entertainment ancillaries etc.) is estimated to be around $700M ever since the first movie, made under the administration of then-DWA boss Jeffrey Katzenberg, was released in November 2016 and ultimately grossed $346.8M at the global box office. Finance sources say that movie, which carried a $125M pricetag and $105M in global P&A, netted a profit after all ancillaries (not including consumer products) of $19M. Worldwide home entertainment and TV revenues — and remember this was off the cascading of theatrical grosses — were estimated to be around $170M. The hype for Trolls was teed off at the Cannes Film Festival that year with the debut of Justin Timberlake’s single “Can’t Stop the Feeling” which ultimately went quadruple-platinum with close to 8M copies sold and scored an Oscar nom. Dolls, a 52-episode run of spinoff series Trolls: The Beat Goes On on Netflix and an NBC Christmas special followed, among many other tchotchkes.

And with the theatrical window model being the best means to optimize profit on an event film priced at $80M+ before P&A, why in God’s name would Universal even think about (largely) skipping theatrical on Trolls World Tour, or involving a simultaneous VOD window? It’s part of a $700M franchise! Wouldn’t it have been better to re-schedule the movie to a later date? There was clear want-to-see of the sequel as three trailers amassed 130M views prior to this pic’s availability tonight.

‘Trolls World Tour’ Trailer: Ozzy Osbourne & Rachel Bloom Want To Turn Musical Diversity Into A Boneyard

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The decision to take Trolls World Tour into homes sooner stemmed from a last-minute pivot by Universal.

In all fairness to the studio, its original intent was to open Trolls World Tour in movie theaters. It even was going to preview it to exhibitors at this year’s CinemaCon before that event was canceled. When MGM’s No Time to Die departed Easter weekend for a hopefully less hostile COVID-19 Thanksgiving launch later this year, Uni moved Trolls World Tour up by two weeks — because who wouldn’t want to take advantage of one of the most lucrative holiday weekends at the box office? Easter weekend is where Uni first shattered holiday opening records with Furious 7‘s $147.1M in 2015 before being beaten a year later by Warner Bros.’ Batman v. Superman, which opened to $166M.

Further proof that Uni had its theatrical heart in the right place: Trolls World Tour was receiving marketing support through Comcast/NBCUniversal’s Symphony program — which only select event pics receive in a given year — with the title being pushed across the conglom’s entire portfolio, i.e. Trolls balloons in the Macy’s Day Thanksgiving Parade, the re-airing of the Trolls Holiday Special on NBC, along with custom pieces on NBCUni cable networks Bravo, E!, Universal Kids, USA and Syfy, along with an expanded Xfinity co-branded campaign. A Trolls theme night even aired on Telemundo, which included four minutes of promo time for the Walt Dohrn-directed sequel.

Deadline/A. DAlessandro

But then theaters started closing gradually, with New York and L.A. being forced to shut down, and it was then that Uni, in its risk analysis, opted to go through with a truncated window experiment that has, in recent years, been reportedly championed by NBC Universal CEO Jeff Shell. Historically speaking, the conglom tried (and pulled back from) crunching the window with the 2011 Ben Stiller-Eddie Murphy comedy, Tower Heist.

A big factor when it came down to putting Trolls World Tour in the home with whatever theaters were available: much of the global media buy had already been scheduled with promo partners (like Oreos) and consumer product commitments ready to go. Another interesting tidbit is how the Trolls brand found a great life in the streaming window post its life in cinemas: Netflix ran eight seasons of Trolls: The Beat Goes On. The franchise’s young fans were already at home.

But hold a second. What about Mulan?

Disney

Disney pulled that movie 16 days before it was set to open on March 27 (stateside and global). Certainly Disney stood to lose millions for all the media they already spent. Why didn’t their promo partner and consumer product commitments force them to stay put, or at least consider VOD?

When it comes to moving around consumer products and promo partners on a film, anything is possible. It can be accomplished, just at a cost. And in certain cases, like with No Time to Die, some products are on a time line and just get released, i.e. the Omega watch for the 007 film dropped in December. Industry finance sources do believe that even with Trolls World Tour morphing from a largely theatrical to VOD release, they had to eat up some cash. We’ll get into dollars and cents, black and red ink, further down. What is absolutely fair to say is that Uni didn’t orphan the movie; they supported it like a full wide theatrical release, with constant pumping in TV ads and online from Comcast sister company Fandango tickets, which has its own PPV arm FandangoNow.

Yet many questions arise about whether this whole Trolls World Tour experiment will make money, and there aren’t concrete answers, but here’s some hints:

At the price of $19.99 for a 48-hour rental, will everyone marooned at home want to see what was expected to be a theatrical release?

REX/Shutterstock

Maybe.

Exclusive boxing matches are about the only types of PPV which ring up big cash to this day. 2017’s Floyd Mayweather Jr, vs. Conor McGregor drew 4.3M domestic buys and made $600M revenue for Showtime, more than each of the fighters’ combined paychecks. But that was at $99.99 a pop. One must factor in that when it comes to movie consumption in the home, VOD buyers aren’t en masse like they were in the late 1980s/early 1990s. With streaming subscription services like Netflix, Hulu, Amazon, CBS All Access and even HBO Go at consumer fingertips, will today’s quarantined, cash-strapped consumers graze outside those comfort zones and pony $19.99 for a title that will expire in 2 days? Hmmm.

Some analysts are predicting yes, guessing 9M-12M global transactions for Trolls World Tour in its first VOD cycle, around $200M in upfront revenue.

Lionsgate

As a point in reference, Lionsgate’s John Wick 3, which made over $326M WW, yielded 3M units in the first month of its home entertainment window, and that was from varying price points across packaged media, electronic sales, and VOD. Lionsgate screamed that it was their best first month home entertainment revenue for a title since 2014’s The Hunger Games: Mockingjay – Part 1.

Even after the studio/VOD retailer rental share of 80% to 20% (which is better than the 50/50 split between a studio and exhibitor), that wildly projected $200M money could cover Trolls World Tour‘s nut of $90M production cost, and supposed $30M global P&A to promote the current VOD release (some rival distributors are doubting that P&A number, and believe that while global marketing was less than $100M, Uni could be on the hook for more than $30M). Also covering Trolls World Tour’s costs is a Hulu streaming window deal that is valued around $25M.

Studios typically do not report video revenue, chiefly because there’s no central efficient means of monitoring in real time like Comscore’s box office data system (a reporting crossways between theaters and studios). Home entertainment monies usually are reported by several outlets (i.e. GooglePlay, cable systems) and such figures are often delayed in their arrival to the studio.

Those close to Trolls World Tour say their costs are covered, and that they’ll be just fine off this experiment.

Deadline’s finance sources disagree, unable to calculate how the deletion of a theatrical window will benefit downstream revenues for Trolls World Tour. Will people want to rent or buy it in subsequent windows? Because of this, some believe the sequel is primed to lose at least its production cost ($90M). Remember, that global home entertainment and TV figure we gave you earlier of $170M for the first Trolls? That was spurred by a WW box office gross of $346.8M.

“Look, in the current environment with theaters closed, it stands to reason that all major studios will experiment where they can by putting notable movies in the home; just to see what happens,” says one major studio marketing boss, “It doesn’t mean that we’re turning our backs on theaters or the theatrical window model.”

‘F9’ Universal

And as far as the notion that theaters owners will be like elephants and never forget about what Universal did here by putting Trolls World Tour in homes ASAP: No matter how angry they are now, they’re certainly not going to thumb down F9 or Minions: The Rise of Gru in their cinemas next year.

Rick Roman, an independent theater owner with cinemas in Kentucky and Delaware, is sympathetic to Universal right now, but emphasizes caution:

“With all the theaters closing, Universal’s decision makes sense. People need to be entertained while they are camped out in their homes. If this crisis becomes the justification for the studios getting what they want, which is VOD day-in-date with theaters, then the $11 billion egg from the golden goose will be fried.”