A few weeks back, we posted this article posing the question on whether or not Sony should have canceled the theatrical release of its film, The Interview. The cancellation came at the demands of a group known as the “Guardians of Peace” and was a larger part of a data breach the company suffered.
Initially Sony wasn’t going to release the film at all but then shifted gears in what some may call a brilliant strategy by releasing the film in video-on-demand (VOD) channels and only to a select number of theaters. While they may not have recouped 100% of their investment in the film, Sony reported a few days after release that the film made more than $15 million in online sales and $2.8 million in independent theaters performing as expected. As of December 24th, the film was made available through channels like iTunes, Google Play, YouTube Movies — and Netflix joined the party on January 24, 2015.
But is this a big deal? There are a few possible scenarios that can be gleamed from the success of this strategy.
Anytime/Anywhere Content is a Big Deal – This isn’t a shocker because this has been proven with the success of streaming services. But until the “exclusive content” war started to heat up, content was recycled and dated. Releasing a film via VOD on the same day and date with a theatrical release gives fans a choice on how to consume content. If the interest is there, the fans will be there too.
R.I.P. Direct-to-DVD Films – As society continues moving to a digital world, this could impact the DVD world. The DVD market for mainstream releases isn’t going away anytime soon, but studios creating films strictly for DVD release may look at VOD as a primary distribution method. This allows content to be more accessible to a wider audience as well as attract new audiences that may not frequent brick and mortar stores regularly.
More Storage, Please – VOD services rely heavily on cloud data centers to host content. The storage industry (HDD/SSD) shipped nearly 120 billion Gigabytes of raw capacity to data centers around the world in 2014. By 2020, we think that number will go up to 750 billion Gigabytes.
Personal storage devices such as Personal Cloud or Seagate Wireless will also be in high demand as the need for personalized content increases. People buying digital movies are going to need somewhere to put them.
Video on Demand is big business with a lot of companies getting a piece of the pie. While it’s too early to tell if film studios will be shifting their business models to support VOD as part of their content rollout strategy, the success of The Interview makes for a great opportunity to test the waters and release more films through this outlet.
