How will major films be released in the near and distant future, and how will that affect the licensing business?

The first question is at the heart of the war of words between AMC Theaters and Universal Pictures’ this week after NBC Universal CEO Jeff Shell’s comments about the success of the straight-to-VOD performance of Trolls: World Tour, and how that might play into future film release patterns – specifically the possibility of simultaneous theatrical/VOD debuts. Trolls is one of a handful of films – Artemis Fowl (Disney) and Scoob (WarnerMedia) are two other notables — moving straight to VOD as theaters remain shuttered.

Impact of potential change
Any reformulation of release patterns for major films –typically released with 90-day windows for movie theaters — would potentially impact licensees and the retailers that carry their products. As AMC President CEO Adam Aron said in his open letter to Universal Studios Chairman Donna Langley: “We all know that… theatrical releases indeed boost publicity, positive word-of-mouth, critical acclaim and downstream revenues.” For the licensees, the marketing dollars, promotion and PR support are key elements supporting film-licensed goods.

“We can see what a huge audience ‘at home’ can produce from ‘Tiger King’ to ‘Game of Thrones,’ but none has been a hit with kids and none has delivered a merch program,” says Jay Foreman, CEO of Basic Fun, while also noting the neither of those is “a hit with kids [that] has delivered a merch program.” Basic Fun is master toy licensee for Scoob and launched licensed products exclusively at Walmart this month. “If the big theatrical release goes away, we will feel it. Hopefully they can do both — Go theater for a week and then wide.”

The broadest audience
As a licensee, Foreman voices support for whatever distribution scheme brings the broadest audience. “The more people that can experience and enjoy a film and release of product could be a positive thing in general,” he says. “My only concern is the emotion and enthusiasm of the in-theater experience.”
A VOD-only plan, he continues, risks losing “the emotion and enthusiasm of the in-theater experience. I remember coming out of Star Wars and Rocky with everyone beaming about the movie and swinging their arms like they had a light sabre or they were boxing Apollo Creed! Or seeing little girls singing “Let it Go” after Frozen. You won’t get that feeling anymore.”

During an earnings call yesterday (Wednesday) Hasbro CEO Brian Goldner also struck a measured tone. “I don’t think any of us only want to watch content at home…. People want the shared experience of going to a movie theater. It has been part of global way of life,” he said. “It’s sort of part of a middle-class disposable income experience, and all of our friends and family certainly miss going out to movies, and I expect that people all over the world miss that opportunity as well.”

He also said that other platforms will flourish, with content, merchandise development and marketing shaped to address the audiences to whom those platforms appeal.

Hasbro is the master toy licensee for Trolls, and Goldner acknowledged that the unavoidable late shift to VOD and eCommerce from what had been planned as a traditional movie release primarily through brick and mortar had depressed its expected business. “When you expect a theatrical release, you are eventizing around that theatrical release with… retailers and bringing people into stores [for] multiple categories of consumer products, including toys and games,” he said, adding that  “We’re really heartened with the fact that there will be still a home entertainment window for Trolls” via which Hasbro hopes to ramp up Trolls-related business.

The ways in which movie theaters and the film industry will adapt is among several topics discussed in the the Licensing International VRoundtable, “How The Ecosystem Is Shifting.”  Licensing International members can access the complete session by clicking here, and logging in as a member .