Sony’s big internet video gamble seems to have paid off: The Interview, which the company offered for online rental and purchase on Christmas Eve, earned more than $15 million during its first four days on the internet. The film was rented or purchased more than 2 million times from Dec. 24-27, making it the studio’s most successful online release ever, while also grossing an additional $2.85 million from 331 independent North American theaters over the four-day holiday weekend.
Sony did not reveal how many of those 2 million video-on-demand transactions were rentals ($5.99) versus purchases ($14.99), nor did the company disclose its revenue split with its online partners. But The Interview’s $15 million haul easily outpaces previous “day and date” VOD successes like Snowpiercer ($7 million) and Bachelorette ($8.2 million).
The Interview turned out to be the breakthrough victory that VOD has been waiting for. Yet despite this seemingly terrific news, the long-term Interview forecast is still bleak for Sony. The film’s combined internet and theatrical grosses for the holiday weekend are well below the $20 million it had been projected to gross during its original release plans, which had included roughly 3,000 North American theaters.
And while Sony should be commended for convincing 2 million people to pony up for VOD despite the absence of the biggest VOD players—including Comcast, DirecTV, Apple, and Amazon—the company can’t erase the memory of its embarrassing actions earlier in the hacking scandal, when it capitulated to the hacker demands and canceled the film’s theatrical release. As The New York Times’ David Carr noted last week, “the movie industry will look back at this crossing of the Rubicon with a deep sense of shame.”
By making those day-and-date internet video deals, Sony has also lost out on the additional VOD revenue that would have come 90 days or so after the film’s theatrical release—which means that its chances of making back The Interview’s estimated $75 million budget are exceedingly slim. The film’s online success might be a qualified moral victory for Sony, but it definitely won’t be a financial one—and that’s even before calculating the significant financial fallout from the hacking scandal, which could be as much as $100 million.
Instead, the biggest winners from the weekend are the internet outlets that first streamed The Interview in North America. Google’s two sites—Google Play and YouTube Movies—were responsible for the bulk of sales, and Google also benefitted from exposing its platforms to consumers who regularly choose iTunes, or other VOD platforms that did not carry the film.
Meanwhile, several other players were left on the sidelines. Apple declined to participate in the initial Dec. 24 online release, which meant that iTunes customers—myself included—were forced to look for other VOD options. While iTunes finally added the film on Dec. 28, the four-day delay put Apple in the unusual position of lagging behind the pack, instead of leading the field.
Ditto Netflix, which could have been the hero in this scenario just a few weeks ago. And while Netflix is now in talks with Sony to add The Interview (and cleared a major hurdle when Sony convinced Starz to release its pay TV rights to the film), it too will be a follower instead of an innovator—an alien scenario for a company that built its reputation on risk-taking.
The cable providers also lost out on a major piece of VOD revenue, and proved themselves to be nowhere near as nimble as their streaming competitors. Like Apple (or Amazon, which also sat out on offering the film), they were unable to provide consumers with access to the most in-demand VOD movies in years, possibly ever.
But the week’s biggest Interview-related losers were the major North American theater chains, which had previously been so successfully at keeping premium VOD at bay. They just lost their first big battle, while also missing out on their portion of the $20 million in revenue that The Interview could have pulled in over the holiday season. Instead, more than 2 million potential moviegoers were exposed to the ease and reduced cost of watching a new Hollywood release at home.
However long it takes premium VOD to become a reality—and as the book, TV, and music industries all know too well, resistance is ultimately futile—The Interview will be seen as one of the format’s earliest watershed moments. So while Sony might be crowing about the film’s online success, Google and the other streaming providers were the week’s true Interview winners.