As Theaters Close, It’s Transactional VOD’s Time to Shine

While many U.S. business are in free fall thanks to COVID-19, the pandemic is providing a unique opportunity for transaction video-on-demand services like Vudu and iTunes, with so many people at home and looking for something to watch. Amid intensifying measures to stop the spread of the novel coronavirus, most theaters around the country have closed, and movie distributors are instead dropping their current release titles. This morning, Disney said its Pixar title Onward would be available for digital purchase tonight, while NBCUniversal’s Universal Pictures is offering up titles like The Invisible Man, Emma and The Hunt for digital rental beginning today. It’s a move to help film distributors shore up significant drops in ticket revenues and give them alternative ways to get their films in front of paying, housebound Americans. As movie theaters and other entertainment businesses see their revenue sources dry up, the digital platforms that let customers rent or buy movies or TV shows—known in the industry as a transactional video on demand, or TVOD, services—are getting their time in the spotlight. “The current situation allows the studios to try new models of distribution to consumers via TVOD premium rentals or purchases, filling an entertainment gap many consumers are currently experiencing,” said Jeremy Verba, vp and gm of Vudu, the Walmart-owned streamer that offers both transactional and free ad-supported streaming options. Movie theaters traditionally get a 90-day window to distribute films before those titles become available for digital purchase or rental. In the time of the coronavirus, though, that time frame quickly collapsed. While some distributors have delayed upcoming releases, others are following Universal Pictures’ decision to drop films early. Warner Bros.’ Birds of Prey, Sony’s Bloodshot, STX Entertainment’s The Gentlemen, Universal Pictures’ Dolittle and Paramount's Sonic the Hedgehog are just some of the other titles that will be available to buy or rent in the coming week. [article_summary section="1"]TVOD services including iTunes, Amazon Video, FandangoNow and Vudu are seeing a surge in rentals and purchases as moviegoers turn to their home theaters to watch titles they may have previously seen on the silver screen. Vudu is seeing increases both in streaming rental and purchase transactions, Verba said, as well as the company’s ad-supported free streaming offering. Titles from almost every genre have seen a boost on the platform. “Over the last few weeks, we have seen a steady increase in viewing behavior, with a significant surge across several of our key metrics in the last week specifically,” Verba said. On FandangoNow, NBCU's TVOD streamer, family films, comedies, thrillers and fantasy titles are all performing particularly well, said Fandango president Paul Yanover. While there’s a surge in interest in films arriving straight out of theaters, there’s also “solid demand” for other films like Jumanji: The Next Level, Star Wars: The Rise of Skywalker and Spies in Disguise. “During this unprecedented time, we’re all looking for entertainment to watch at home, and our FandangoNow on-demand streaming business is strong,” Yanover said. FandangoNow’s parent company, Fandango, is known primarily for online ticket sales to movie showings, but the company is focusing more heavily on its transactional streaming offering now that theaters are temporarily closed. Yanover said the pivot is a short-term one. “Many of our cinema partners have needed to close temporarily to keep our communities safe, but when they reopen, we’ll put the full weight of our business behind celebrating the movie-going experience,” Yanover said. "The movie theater business is resilient, and the exceptional experience of discovering a new movie on the big screen with a community of fans cannot be duplicated.” The swift changes in the film release schedules mean TVOD services have to adjust their own schedules to account for new titles arriving much sooner than previously expected. “With the shift of movies to earlier on the calendar, we will have to be smart about how we program and merchandise our deep library of content to meet consumer’s viewing habits later this year,” Verba said. Some are looking to take advantage of the newly captive audience. FandangoNow is offering a 30-day 20% discount on all movies and TV rentals and purchases for first-time customers, Yanover said. Vudu is focused on making new premium titles front and center so they're easy to find and buy. “It is encouraging to see so many studios giving consumers more options on how, where and when they can view great movies during this time,” Verba said. “We will do our part in making it easy for consumers to find these premium titles and ensuring they understand the great new value proposition these new viewing options provide.”

Streaming & OTT

As Movie Theaters Close Around the Country, It’s Transactional VOD’s Time to Shine

Titles like Onward are migrating to digital platforms sooner than ever, and viewership is spiking

Kelsey Sutton

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Kelsey Sutton