The unbelievable saga of The Interview has been a nightmare for both Sony and US theater exhibitors. But on Christmas Eve, it became a potential savior for on-demand internet video, which is suddenly getting the groundbreaking moment it has waited years for.
For years, premium video on-demand (VOD) has been a white whale for studios, which have been unable to convince theater chain owners to grant any leeway in their traditional 90-day exclusive window after a film’s theatrical release. Those exhibitors have good reason to be worried: This year’s North American movie ticket sales fell 4%, to $10.5 billion, and one of the most reliable moviegoing demographics, kids and young adults ages 12 to 24, went to the movies 15% less often.
That’s why exhibitors have batted down every previous attempt at premium VOD. In 2011, Universal had planned an experiment with its Ben Stiller-Eddie Murphy comedy Tower Heist, releasing it on VOD—in just two medium-sized cities—three weeks after its theatrical release. Several enraged exhibitors threatened to ban the film from their theaters, forcing Universal to abandon its plans. Just this fall, the major North American chains announced they were boycotting next summer’s IMAX release of Crouching Tiger, Hidden Tiger sequel, because Netflix will be streaming it to subscribers at the same time as the theatrical release.
More recently, Warner Bros. circumvented the window by paying the AMC theater chain to “rent” 260 screens in March,when it showed Veronica Mars the same day it was available on VOD. It was the first time one of Hollywood’s six major studios had attempted a so-called “day-and-date” release. The film made $3.3 million in US theaters, but the experiment’s ultimate outcome remains a question mark, as Warner never released figures for VOD.
VOD revenue isn’t routinely released unless the studios choose to do so. Given the limited available information, it appears that the most successful “day and date” releases, including 2012’s Bachelorette, have earned more than $5 million on VOD. This year, the indie action thriller Snowpiercer grossed more than $6.45 million in two months via VOD, which dwarfed its $4.5 million revenue in US theaters.
Given the consistent exhibitor pushback, it’s little wonder that in September, Walt Disney Studios president Alan Bergman said, “I don’t see any substantial changes … in the next few years,” in premium VOD from the major studios.
That was two months before the Sony hacking saga began and set these unbelievable events in motion. Given the degree that Sony’s back and forth via The Interview’s release plans has already angered exhibitors, the studio had no qualms about pursuing a premium VOD release, especially when the largest chains had already decided not to show the film, citing safety concerns.
So now, unexpectedly, premium VOD has its big moment in the spotlight, a chance to show Sony and the other major studios just how lucrative it can be. Whether you previously wanted to see The Interview or not, politicians have turned the act of buying a ticket or streaming it online into an expression of US freedom in the face of attempted North Korean censorship.
That means there is a potentially massive audience for this film, a much bigger one than existed just weeks ago. And now those people can watch it in the comfort (and safety) of their own homes, without shelling out for parking, concessions, babysitters, or advanced ticket fees. No need to worry if the movie will sell out.
If Sony’s experiment succeeds, premium VOD will suddenly get the momentum it has needed after years of stagnation. If it fails, then VOD’s prospects will be seriously, perhaps fatally, wounded.
Either way, on Christmas, studios will finally find out if VOD is a gift they’ve too long ignored.