Is “The Interview” a Game-Changer for Film Distribution?

So must of us probably remember the weird events surrounding the film “The Interview” which (sort of) premiered on Christmas Day. This film got a lot of attention for its premise, which included points like showing the country of North Korea, exposing the horrors with hunger and oppression that take place there, and even setting out to assassinate Kim Jong Un, the dictator of North Korea.  Despite these somewhat serious issues, the film comes across as goofy and quite mediocre. Even so, this was an important film, because it potentially paved a new path, quite accidentally, for film distribution. I love all things behind the scenes with film, and I’m analyzing the film publishing market in my 21st Century Publishing Report. So, naturally, I found all of this fascinating.

Let me go back and highlight the events that led up the movie, according to the Huffington Post. On Dec. 16, a hacker group threatened violence against movie theaters that would show the movie. Sony planned to release the film, and gave theater owners the option to do whatever they wanted with it. Malls everywhere put pressure on theater chains to cancel their showings, as they didn’t want the threat to scare away consumers. Big companies (such as AMC, Regal, Cineplex, Cinemark) and small (such as Carmike Cinemas) alike decided not to support the film by dropping or delaying its release.  Ultimately, about 1,600 movie theaters in North America opted not to show the film.

On Dec. 17, Sony pulled the movie from theaters. They said in a statement that day that they were unlikely to release the film on-demand, or even at all. The next day, they announced that they also wouldn’t release the film internationally. However, eventually Sony changed their minds. According to The New Yorker, Sony showed the film in a few hundred theaters in the U.S., and they also let people watch it online through Google, Microsoft, or a Sony Website. For $5.99 people could stream it, or they could download it for $14.99.

This move was quite unusual, but also quite significant. “Most films are made available for streaming or downloading, and for DVD purchases and rentals, several months after their theatrical release,” the New Yorker states. Releasing films theatrically and online simultaneously is quite rare, a process known as “day and date.” According to Paul Dergarabedian, a senior analyst at the media-measurement company Rentrak, most big studios still generate their revenues through box-office sales rather than digital distribution (such as downloads, streaming, DVD sales or rentals). So, this approach doesn’t make much sense for big films.

In the end, VOD (video-on-demand) served Sony well. The film made $2.8 million at the theaters (which is quite low, but it’s still something), but around $15 million digitally through streaming and downloads. Sony had been projecting a $20 million revenue from opening day weekend with its wide release, and it almost hit that number while being shown theatrically in less than 10% of the theaters that were planned.

Does this mean that “day-and-date” distribution is the way of the future for Hollywood films? Most experts don’t think so. Sony’s film is seen as mostly a unique case, with the events surrounding the film providing unforseen (free) marketing opportunities that won’t happen again for other films. Wade Holden, a research analyst who tracks film distribution, doubts that studios will drastically alter their distribution patterns. “I don’t think The Interview‘s performance on digital will sway Hollywood studios away from the current distribution model. All of the media attention that this film received due to the Sony hack, I think, skews the results and doesn’t make this a good case study.”

In my opinion, I think this film makes an excellent case study. In fact, one of my sources for this post was a case study for the film done by The New Yorker. While we study the effects of this film on distribution platforms and digital delivery systems, we have to keep in mind that what happened with this film isn’t the norm. If we do that, though, I think there is real potential in and value in learning from this experience, and it could still possibly lead to changes in film distribution. From an article at USA today, Michael Pachter, managing director of equity research at an investment firm, seems to agree.

“The studios need the exhibitors … to promote their films and need the event of a premiere and the buzz it creates,” he says. “It is unlikely they will tinker with the existing model, but they may consider compressing the window between exhibition and digital delivery to something shorter than three months.”

With an increase in digital distribution already on the rise, maybe an event like this will cause an even greater shift in the future. Only time will tell.

Sources:

http://www.huffingtonpost.com/2014/12/18/the-interview-timeline_n_6350476.html

http://www.newyorker.com/business/currency/interview-film-industry-case-study

http://www.firstshowing.net/2014/will-the-interview-vod-success-change-film-distribution-game/

http://www.usatoday.com/story/tech/2014/12/31/the-interview-future-of-movie-distribution/21074303/

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2 thoughts on “Is “The Interview” a Game-Changer for Film Distribution?

  1. chadprom February 18, 2015 / 6:47 pm

    I was surprised to learn that Sony would release the film at all after hearing about the backlash it received. Initially I thought that it was all a publicity stunt and would eventually hit the big screen. I was wrong. However, the film was eventually released on Netflix and I was particularly surprised by this. I would have paid the $15 to download it had it not been on Netflix. I wonder how profitable it was for Sony to grant Netflix the right to the movie.

    Like

    • alivalerio February 19, 2015 / 3:13 am

      Wow, I forgot that the film was released on Netflix. I think you’re right, that came after all the hype and after the $15 million through the initial wave of streaming / downloading. I wonder, too, could Sony have held off longer and made more money? Perhaps Netflix offered them a whole lot of money for it, though I’m not sure how all that works. It seems that though Sony already “broke all the rules” they may have waited longer, since even regular films with a theatrical release wait a while before they show up on Netflix (and not all of them do).

      Like

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