How ‘The In­ter­view’ con­tro­versy could change the money-mak­ing game


Sony ap­pears to have a win-win with “The In­ter­view.” Not only did the stu­dio score a moral vic­tory by re­leas­ing the film in the face of hacker threats, the movie made at least US$15 mil­lion from more than 2 mil­lion dig­i­tal rentals and pur­chases in its first four days.

On Fri­day, it seemed un­likely we’d ever know if the si­mul­ta­ne­ous — or “day and date” — strat­egy paid off. Now, it’s tempt­ing to sug­gest this may be the start of a brave new world of dis­tri­bu­tion. Add in the US$2.8 mil­lion from “The In­ter­view’s” limited the­atri­cal re­lease and things aren’t look­ing so bleak for the Seth Ro­gen-James Franco R-rated com­edy.

But the story is far from over and many are di­vided about its out­come. For some, “The In­ter­view’s” videoon-de­mand (VOD) rev­enue sig­nals a revo­lu­tion.

“It’s a huge num­ber and it’s one that is prob­a­bly mak­ing the other stu­dios sali­vate,” said Jeff Bock, a se­nior box of­fice an­a­lyst for Ex­hibitor Re­la­tions. “Now there is some­thing to put on the bulletin board that says, ‘Yes, VOD is def­i­nitely a vi­able op­tion.”’

But one might also post on the bulletin board that it’s stan­dard in­dus­try prac­tice not to re­lease VOD fig­ures. That’s why the pub­lic only hears about them when they’re good. For in­stance, 2011’s “Brides­maids,” which had al­ready been re­leased the­atri­cally, made US$24 mil­lion from VOD in four months, al­low­ing Univer­sal to de­clare it the most popular VOD re­lease of all time. But how many VOD bombs have there been?

Also, if Sony hadn’t been hacked and this film wasn’t pushed to the cen­ter of a na­tional con­ver­sa­tion, it could have eas­ily made US$20 mil­lion to US$25 mil­lion on open­ing week­end — not un­like “Pineap­ple Ex­press,” a sim­i­larly raunchy R-rated com­edy star­ring Ro­gen and Franco. This would have come far closer to pay­ing off “The In­ter­view’s” US$40 mil­lion pro­duc­tion bud­get and roughly US$10 mil­lion mar­ket­ing cost.

His­tor­i­cally, the movies that have pros­pered with a si­mul­ta­ne­ous the­atri­cal and VOD re­lease have been the ones with the smaller bud­gets, des­tined for art houses and in­de­pen­dent theater chains.

For ex­am­ple, J.C. Chan­dor’s Wall Street thriller “Mar­gin Call,” a US$3.5 mil­lion movie that Lion­s­gate and Road­side Attractions ac­quired for US$1 mil­lion, was re­leased in the­aters and on de­mand in the fall of 2011 and picked up around US$5.4 mil­lion from the­atri­cal and another US$5 mil­lion from VOD. Mag­no­lia, IFC and Ra­dius-TWC have all had sim­i­lar suc­cess sto­ries.

On the other hand, the ma­jor stu­dios haven’t had the op­tion to even test day-and-date strate­gies be­cause it would jeop­ar­dize the 90-day re­lease win­dow re­quired by big ex­hibitor chains. In 2011, Univer­sal tried to re­lease their Ben Stiller com­edy “Tower Heist” on VOD for US$59.99 just three weeks after its the­atri­cal open­ing, but theater own­ers balked and chains like Cine­mark threat­ened to can­cel their show­ings. Univer­sal ended up scrap­ping the plan.

Sony, mean­while, only started pur­su­ing dig­i­tal op­tions after the ma­jor theater chains dropped the film fol­low­ing hacker threats to blow up the­aters.

In ad­di­tion, many ex­cep­tional con­di­tions fac­tored into “The In­ter­view’s” first week­end. It be­came an un­likely event movie, and see­ing “The In­ter­view” was akin to as­sert­ing one’s free­dom of speech. That’s buzz you can’t buy.

“We don’t want to be told what we can and can­not watch,” said Ren­trak’s se­nior me­dia an­a­lyst Paul Der­garabe­dian.

That also ap­plies to un­der­age teen au­di­ences, who were sud­denly able to eas­ily and af­ford­ably ac­cess an R-rated movie.

Bock thinks that even when the ex­tra­or­di­nary, aware­ness-boost­ing events sur­round­ing “The In­ter­view” are taken into ac­count, the film’s hy­brid open­ing still has the po­ten­tial to change ev­ery­thing, even if it takes years.

“The truth is, the VOD oblit­er­ated the the­atri­cal,” said Bock. “When you think about what the real fu­ture of dis­tribut­ing films is, it’s got to be as easy as one click. If that’s as quickly as you can get money from peo­ple, well, the stu­dios are go­ing to lis­ten. It’s just eco­nomics.”

Oth­ers, like Der­garabe­dian, be­lieve the old model will pre­vail, but with VOD growth.

“I think 2015 is go­ing to be the big­gest box of­fice year ever in the­aters and that’ll have a rip­ple ef­fect in VOD. The VOD space ben­e­fits from movies do­ing well in the the­aters,” he said.

But years down the line, this case will not be for­got­ten, es­pe­cially if Sony con­tin­ues re­leas­ing its dig­i­tal num­bers. While it’s un­likely that we’ll ever get a day-and-date re­lease of a Mar­vel block­buster, the US$25 mil­lion com­edy, drama or rom-com could, now, be fair game, no mat­ter how un­com­fort­able it may be for theater own­ers.


This photo re­leased by Sony/Columbia Pic­tures shows, James Franco, cen­ter left, as Dave, and Seth Ro­gen, cen­ter right, as Aaron, in Columbia Pic­tures’ “The In­ter­view.”

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