Shift Happens
COVID-19 has triggered one of the greatest shifts and disruptions in all of history. These shifts and disruptions will create business casualties along the way. It is my belief that the entertainment industry will have one of the greatest disruptions while the movie theater industry will be a casualty of COVID-19
One of my mentors, Rich, often harps on business shifts, changes, and disruptions. He has coached and trained me to a point where I am constantly looking out for market shifts and external disruptive forces.
In early March, I saw disruptive forces at work with COVID-19 and social distancing. I started seeing there will be changes and shifts in how consumers will do business, including entertainment, retail shopping, and more.
It first started with Disney releasing Frozen II early on Disney+ and other digital distribution channels like iTunes, Google Play, and Amazon. Disney followed up by releasing Star Wars: The Rise of Skywalker on those same digital distribution channels. Universal Studios released The Invisible Man, The Hunt, Emma, Trolls World Tour. Lionsgate released “I Still Believe”. All online.
What quickly caught my eye was that several movie theatre releases slated were now directly available for rent. With COVID-19 shutting down theatres, the movie studios adapted and shifted their business model from a movie theatre release to home movie experience, bypassing movie theatres. My gut instinct was that once consumers tried movies at home, and if they liked it, they may never return to a movie theater again. The proof will be in its sales.
On Tuesday, the Wall Street Journal reported that “Trolls World Tour” generated more money in three weeks than the original ‘Trolls’ movie did during its five-month domestic theatrical run.
Excerpt from Wall Street Journal:
With nearly five million rentals in the U.S. and Canada, the digital release has in three weeks generated more revenue for Universal than the original “Trolls” did during its five-month domestic theatrical run, according to a person familiar with the matter. Its performance has convinced Universal executives that digital releases can be a winning strategy, and may diminish the role of theaters even after the pandemic passes.
The question now becomes whether this is an exception due to the shelter in place ordinances, parents are buying movies as a means to help their children entertained or whether it’s the new norm.
I choose to believe it’s the new norm.
