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Lessons Learned from Sony's handling of The Interview, Theaters, and VOD by Jennifer Porst

by Ethan Tussey

During moments of disruption in the media industries, one force that prevents dominant media companies from taking advantage of new media and technologies is their allegiance to those they consider their major customers. In the case of the film studios, they consider their major customers to be the theatres. Until the economic potential of the internet is rich enough to tempt the studios away from the theatres, the theatres maintain a stranglehold on the industry via a longstanding policy that studios wait to distribute films online for several months after a movie opens. That dynamic was tested in December 2014, when the major U.S. theater chains opted not to show Sony Pictures' The Interview. Sony might have taken advantage of their momentary freedom from the theatres by confidently testing the potential of video-on-demand. Instead, the studio announced on December 17 that they had no further release plans. It wasn’t until December 24 that Sony announced it would, in fact, release the film VOD on that very same day. Over the following month, they released the film to different online and cable platforms via drips and drabs.

By January 18, The Interview, which had a total budget of approximately $75 million, had earned $40 million through VOD. Considering the fact that deals with online distributors are often more favorable for studios than deals with theater chains, Sony did pretty well with their last minute decision. I would argue that the studios have made a major miscalculation in viewing the theatres as their primary customers, when it is in fact the audience who should hold that title. Studios should adjust to the behaviors and desires of their audience rather than trying to shoehorn people back into the theatres. The dustup over The Interview gave Sony an opportunity to move with their audience into the twenty first century. Unfortunately, as with so many aspects of the Sony hack, they handled it badly. Although it was ultimately not a total financial debacle, neither was it a rousing success. Rather than serving as a grand step forward, will it serve as a cautionary tale?

Lessons Learned from Sony's handling of The Interview, Theaters, and VOD

Jennifer Porst's In Media Res essay on the week on the Sony Hack.

from In Media Res (2015)
Creator: Jennifer Porst
Posted by Ethan Tussey