“The Interview” Is A VOD Perception-Changer, Not A VOD Game-Changer

The Interview pulled in an impressive $15 million in VOD revenue in its first four days of release. But it’s more anomaly than model.

“The Interview” Is A VOD Perception-Changer, Not A VOD Game-Changer

Over the last few days, a silver lining has emerged from the bizarre and sordid Sony hack saga: The Interview, the scourged Seth Rogen comedy that indirectly undid one of Hollywood’s most prominent studios via hordes of leaked emails, made $15 million in video-on-demand (VOD) revenue within the first four days of its Christmas-day release.


Long regarded as a kind of consolation prize (or dumping ground) for troubled films, or else a platform for small, specialty films that might not resonate with all of America, VOD suddenly has a new, glitzy glamour. Fifteen million dollars, after all, is nothing to sneeze at; past VOD release “coups” have mainly been in the $8 and $9 million range. (The Interview cost $44 million to make.)

Considering that the economics of VOD are far more favorable to studios, which only hold on to 50% of a theater ticket sale (they get 70-80% of VOD revenue) and are able to consolidate their marketing spends, one would think that The Interview would herald a new age, one in which all that anytime-anywhere rhetoric about how we consumers like to experience our content would finally extend to films.

But does it?

The answer is: Sort of. “It shines a light on the possibility,” says John Sloss, the indie film sales agent and lawyer who was a producer on this year’s awards movie Boyhood. “But it’s a complete anomaly.” In other words, while The Interview makes a strong case for a digital release, the circumstances surrounding it were so unusual that it’s hard to use it as a reliable model. An insane media blitz ensured that no sentient human being was unaware of what it was and when it was coming out. Security concerns–threats of violence by Guardians of Peace, as the Sony hackers are known–made seeing the movie (which also came out in 331 theaters) in the comfort of your living room a more enticing idea than seeing it in your local cinema. The low price point didn’t hurt, either–it cost $5.99 to rent the movie on services like iTunes, Xbox and YouTube; that’s a lot less expensive than a ticket at a movie theater.

The biggest hindrance to converting day-and-date theatrical releases to VOD releases, of course, is theater owners, whose livelihoods are threatened by digital distribution–they are fighting the issue tooth and nail. In 2011, when Universal tried to release the Ben Stiller caper Tower Heist on VOD three weeks after its theatrical release, theater chains threatened to boycott the movie entirely, forcing Universal to cave. As that example shows, theater owners insist on an either-or stance, as opposed to the both-and strategy that The Interview received.

Theater owners aren’t the only ones nervous about VOD releases; studios are scared, too. Fifteen million isn’t bad for a piece of the revenue pie, but what if that was the entire pie? Not to mention that while everyone is crowing about the movie’s VOD haul, its box office return was a mere $2.8 million–not surprising given how few theaters it was shown in, but still a reminder that VOD and theatrical releases do not necessarily happily co-exist.


“I think if the theater owners relaxed their windowing, we’d see a lot of big films released on VOD,” says Sloss. “A lot of people believe the optimal situation would be to have a film in the theater for two weeks, when real, hardcore fans would see it, and then have it go on VOD. That saves on marketing. With the three- to four-month window you have now, you have to do a whole new marketing push to build awareness.”

If The Interview isn’t necessarily a game-changer, it is certainly a perception-changer. As Sloss notes, “It’s got everyone talking about VOD,” and not just in the context of small, indie movies like Snowpiercer, the sci-fi film that Radius released on VOD just two weeks after its theatrical release last summer. That decision doubled the film’s grosses to $11 million. The Interview, in contrast, is in every way a major Hollywood movie with A-list stars, a hefty marketing campaign, and a prime release date. That it can perform on VOD, even with all of the “yeah, but it’s unique” arguments, helps build the case that digital isn’t just for special-needs pictures.

Sloss and others agree that simultaneous theatrical and VOD releases are inevitable, but that it will take time. “It’s about cultivating habits,” he says, and raising awareness–both about VOD as a service and about the movies that are released there. At the moment, Hollywood doesn’t treat VOD releases with the same lavish marketing as they do theatrical movies, which can mean films get lost.

Peter Sealey, a consultant and a former Columbia Pictures executives, is even more bullish (though he, too, sees The Interview as a “one-off case”).

“The theater chains are gonna fight it, it’s gonna be a protracted battle, it’s not gonna happen overnight. But it will happen,” Sealey says. “The consumers want it and the studios make more money. Those two factors are the drivers. You can’t fight that.”

About the author

Nicole LaPorte is an LA-based writer for Fast Company who writes about where technology and entertainment intersect. She previously was a columnist for The New York Times and a staff writer for Newsweek/The Daily Beast and Variety.