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Here's The Big Problem With Sony Releasing "The Interview" On Demand

It may be a long time before anyone (legally) sees the Seth Rogen and James Franco comedy. And not because of North Korea.

Here's The Big Problem With Sony Releasing "The Interview" On Demand
[Photo: Ed Araquel, courtesy of Sony, Columbia Pictures]

Earlier this week things quickly unraveled for the Seth Rogen, James Franco comedy The Interview, which depicts a fictional assassination plot against North Korean leader Kim Jong-un. After a message from the hackers known as Guardians of the Peace threatened violent attacks on movie theaters if the film was released, all the major theater chains pulled out of showing it, and then Sony itself canceled the movie's Christmas Day release.

In addition to outrage from Hollywood creatives about the precedent set by such a capitulation, there's been another widespread response from the Internet—that Sony should immediately release the movie on, well, the Internet. Sony could theoretically turn a massive film release disaster (not to be confused with the related massive leaked document disaster) into a groundbreaking Video On Demand premiere. But there are problems with this plan.

Despite being an enormous entertainment corporation, Sony Pictures does not work alone in distribution, and this includes in VOD technology. Sony could upload the movie to the web on its own—but in order to get The Interview onto your connected TV, Roku, Xbox, or other streaming-enabled device, Sony has to work with partners who own the technology and platforms. The one platform they do own—PlayStation—does not have a large enough user base to get the film to the masses.

The risk to those partners with this particular film is, of course, becoming the target of a new cyber attack. And despite the cutting-edge aspect of being part of such a release, the payday likely wouldn't be worth the risk: According to sources who work in the VOD space (who asked not to be identified by name), all seven major studios command very large royalties—in the 80% range—for the first two weeks after release. Sony could lower that rate for The Interview, but if they do that once, it's possible that no one would ever pay them that much again.

One potential VOD partner that is available across a wide range of devices is Flixster, because it's owned by another studio, Warner Bros., which could choose to step in and help Sony out in a show of solidarity. Of course other studios may not want to touch this with a 50-foot pole, or maybe they're dying to. It could happen.

The Interview will undoubtedly get leaked to torrent sites, and even potentially be available to stream on the web. But if a multi-device, VOD day-and-date revolution was the potential silver lining of this catastrophic breach, it's another high hurdle for the maligned movie to leap.

Update: As some of our Facebook readers have noted, one thing Sony could do if it just wanted the movie seen by someone is slap the movie up on Crackle, the company's free streaming service. That might get a few more eyeballs on Crackle in the short term, but as this post reveals, Sony has fallen out of love with the movie service and even recently thought about selling Crackle. Plus, probably the last thing Sony wants to do is put The Interview out for free. But perhaps that is the best option for salvaging such a messy situation?

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