The Hollywood Premiere Is Moving to Your Living Room

With no big-screen options due to the coronavirus outbreak, the movie’s studio, Comcast Corp.’s Universal Pictures, must largely skip the theater and release the animated sequel on digital platforms like its own Xfinity, which Ms. Lynn used. For Ms. Lynn, the rental fee—$19.99 for a 48-hour window—seemed reasonable since it allowed her to have a “Trolls movie party” at home.

By Friday afternoon, her daughter was already on her second viewing. “I’ve technically already got my money’s worth,” Ms. Lynn said.

More Hollywood studios are rushing their theatrical releases to digital services as U.S. theaters remain closed, offering an important test for the future of movies. This could accelerate a shift that was under way before the pandemic hit. The potential result: More movies being produced with the living room, and not the multiplex, in mind.

The outcome of this experiment will have significant implications for studio chiefs, theater owners and moviegoers. For decades, theaters have fought to safeguard an exclusive right to play movies in their auditoriums for months before they become available at home—usually first on premium digital services and then on DVD or cable channels.

Now studios are experimenting with changes to that model that could alter what kinds of movies they green light and when consumers expect to see those movies available at home. A permanent shift would rewrite studio economics, since the box office remains an important source of revenue but digital rentals are typically more profitable than a ticket sale.

Since the coronavirus pandemic closed U.S. theaters, major studios have already shipped more than a dozen theatrical releases to digital services, including the Jane Austen adaptation “Emma,” the Ben Affleck sports drama “The Way Back,” the action sequel “Bad Boys for Life” and the videogame-inspired “Sonic the Hedgehog.” During its first week of availability “Sonic” racked up digital sales more than double what the studio expected, according to a person familiar with the data.

Though some of the theatrical releases have been sold to stream exclusively on Netflix or Amazon Prime, most are available for viewing on all of the major providers, such as Google Play, Vudu and Apple.

The rush-to-rental push is roiling the industry. Theaters see any encroachment on the traditional theatrical distribution model as an existential threat, previously refusing to show any movie whose studio didn’t agree to a window of around 75 days. Exhibitors are particularly rankled by studios that won’t postpone release dates until a time when theaters are expected to have reopened. That is the case with “Trolls World Tour,” the Walt Disney Co. adventure “Artemis Fowl” and Paramount Pictures’ romantic comedy “The Lovebirds.”

Disney is premiering “Artemis Fowl,” a children’s book adaptation, on its Disney+ streaming service, and “The Lovebirds” is headed to Netflix. Theater owners weren’t as upset about those two moves as they were with “Trolls,” since neither movie looked like a box-office winner anyway.

“Movies that had not been released yet are in a different category,” said John Fithian, chief executive of the National Association of Theatre Owners, a trade group. “We’ve asked studios that, for theatrical titles, they postpone and release them later.”

Many studios have conceded to that request with big-budget releases that were supposed to premiere in the coming months. Disney’s “Black Widow,” a Sony Pictures reboot of “Ghostbusters” and Universal’s ninth installment of the “Fast & Furious” franchise have all been postponed until later this year or 2021. With hundreds of millions of dollars in box-office sales expected for these titles, a traditional theatrical run remains too lucrative to pass up.

It is too soon to know if consumers are taking to the $20 rental option since few metrics are available. Studios have little sense of who is deciding to rent the movies—and whether they are fans who would have gone to the theater anyway.

What is known is that an individual rental transaction is typically more profitable for the studio. For theatrical releases, about 55% of ticket sales flow back to a studio; the rest stay with the theater. About 80% of a digital rental charge flows back to a studio, executives say.

There have been discussions about creating an early, premium-priced home-video arrangement that would generate revenue for theaters. But the current crop of $20 rentals doesn’t do so, according to theater and studio executives.

Studios settled on $20 because they hoped consumers would decide it is a fair deal compared with buying a couple tickets and popcorn at most U.S. theaters. For some consumers the price generates sticker shock.

That was the case for Corey Pendergrass, a 36-year-old plumber in Winston-Salem, N.C., who goes with his wife Brittany to the movies about once a month. When he saw “The Invisible Man” available to rent, he thought it was a chance to see a movie he’d missed when the pandemic closed the local cinema. But only if it cost $10, not $20.

A trip to the theater costs about $18 in tickets, he said, but “there is overhead. You’re supporting local workers. There’s the surround sound.” At home, he added, “I pay the power bill.”

He and his wife have opted instead for subscription-service fare like “Tiger King: Murder, Mayhem and Madness” on Netflix, he said. “I know the movie industry is taking a hit,” Mr. Pendergrass said. “Join the club.”

The true test of the experiment comes this weekend with “Trolls World Tour,” which had already begun its national marketing campaign when the theaters closed and will premiere on more than half a dozen digital services. Its studio, Universal, had been considered by rivals to be the most aggressive in disrupting the theatrical model before the pandemic.

When Universal announced the “Trolls” distribution plan with little heads up for exhibitors, some theater owners said the studio was exploiting the public-health crisis to try something it had long wanted to do. A person familiar with Universal’s thinking said the studio had thought it could release the movie in some theaters and digitally before the outbreak caused all locations to close.

“It’s disappointing not to get the theatrical [release], because that’s what we were all planning for,” said Dannie Festa, an executive producer on “Trolls World Tour.” “But given the circumstances releasing our film in this way does make a lot of sense.”

For Micci Alderman, a semiretired motorcycle instructor near Savannah, Ga., the growing prevalence of newer movie rentals may lead to economic changes in her own household. She says she’d like to upgrade her 55-inch TV to an 80-inch big screen.

Last month she and her husband decided to watch a title that had only weeks earlier been screening in more than 3,600 movie theaters: Universal Pictures’ “The Invisible Man.”

The new movie was $19.99 for a 48-hour rental, several times the $3 to $5 it typically costs to rent an older movie. To justify the expense, Mrs. Alderman, 55, invited a friend over who brought pizza and soda.

“I guess I’ve always had a stigma against spending $20 on a rental movie, but times are changing,” she said.