How Sony's release of 'The Interview's' big VOD grosses could tell a game-changing story
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 terrorist threats, the movie made at least $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 $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" video-on-demand 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 $24 million from VOD in four months, allowing Universal to declare it the most popular VOD release of all time.
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 $20 million to $25 million on opening weekend — not unlike "Pineapple Express," a similarly raunchy R-rated comedy starring Rogen and Franco. This would have come closer to paying off "The Interview's" $40 million production budget and roughly $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 and intended for independent theater chains.
J.C. Chandor's Wall Street thriller "Margin Call," a $3.5 million movie that Lionsgate and Roadside Attractions acquired for $1 million, for example, was released in theaters and on demand in the fall of 2011 and picked up around $5.4 million from theatrical and another $5 million from VOD. Magnolia, IFC, and Radius-TWC have all had similar success stories.
It's the major studios who haven't had the option to even test day-and-date before_it would jeopardize the 90 day window required by major exhibitor chains. In 2011, Universal tried to release their Ben Stiller comedy "Tower Heist" on VOD for $59.99 just three weeks after its theatrical opening, but theater owners balked and chains like Cinemark threatened to cancel their showings. Universal scrapped the plan in the end.
Sony, meanwhile, only started pursing digital options after the major theater chains dropped the film following threats from the hacker group.
So many exceptional conditions factored into "The Interview's" first weekend, too. It became an unlikely event movie. Seeing "The Interview" was akin to asserting your 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 that strange confluence of events surrounding "The Interview" is enough 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. "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 the digital numbers. While it's unlikely that we'll ever get a day-and-date release of a new Marvel film, that $25 million comedy, drama or rom-com could, now, be fair game, no matter how unhappy that might make theater owners.