'The Interview' Lost Sony $30 Million, Says Theater Group
"The only game changed here was just how much Sony left on the table," says the National Association of Theater Owners of the movie's controversial day-and-date VOD release.
Breaking its self-imposed silence, the National Association of Theater Owners contends that Sony will lose at least $30 million on The Interview. It also declares that the movie's day-and-date release in cinemas and on VOD changes nothing despite "starry-eyed" comments suggesting it marks a paradigm shift.
"In this simultaneous-release game, Sony is $30 million in the hole and almost out of cards," says Patrick Corcoran, vice president of NATO. "The only game changed here was just how much Sony left on the table."
Corcoran's comments came in a lengthy column he wrote this week for Boxoffice Magazine, an official NATO publication.
Until now, NATO has remained silent on The Interview, the R-rated comedy starring Seth Rogen and James Franco as two bumbling journalists hired by the CIA to assassinate North Korean president Kim Jong Un. A week before its scheduled Dec. 25 nationwide release, Sony pulled the movie following a direct threat against theaters by the group responsible for hacking the studio.
After President Obama — whose administration believes North Korea is behind the cyberattack — criticized Sony for canceling the film, Sony said it would go ahead and release The Interview in theaters and on VOD on Christmas Day (it had already been in talks with VOD providers). However, only a few hundred independent cinemas were willing to play it, since most exhibitors have a blanket policy against carrying a movie that's being made simultaneously available elsewhere.
The major theater chains, including AMC Entertainment, Regal Entertainment and Cinemark, were said to be furious with Sony for the way it handled the matter, because they had initially asked the studio to simply delay the film's release instead of pulling it altogether.
Yet because of the volatile nature of the situation, NATO and its executive board decided to refrain from making any public comments. Corcoran's column marks the first time that NATO has made its views known.
To date, The Interview has earned $5.9 million in theaters. Assuming it even gets to $7 million, Sony will get half of that back, or $3.5 million, explains Corcoran. The comedy has earned north of $31 million on VOD.
"We haven't heard any new digital dollar figures from Sony since Jan. 4, so it's a little hard to estimate where it will end up, but I'm feeling generous. Say $50 million," wrote Corcoran. "Given the chaotic nature of the ad-hoc release plan and Sony's desperation to play the movie on any home-release platform that would take it, I'm going to assume, less generously, that Sony pockets 60 percent of that sum instead of the customary 70 percent."
According to Corcoran, that means Sony will get back $30 million in VOD revenue for a total $33.5 million, far from enough to make up for the film's production budget of $44 million and marketing expenditures of at least $30 million.
"Let's be generous again and assume the same international box office that might have resulted from a traditional release — although with so many pirated, pristine digital copies out in the wild, that may be tough. Add $10 million," Corcoran continued, bringing revenue to $43.5 million, compared to expenditures of $74 million.
Sony sources insist that the budget was closer to $40 million and that the marketing budget was lowered to $20 million because of The Interview being pulled. Most industry experts, however, dispute that marketing was reduced by that much and put the total spend closer to $40 million.
The studio has announced that The Interview will be released on DVD and Blu-Ray on Feb. 17, but Corcoran questions whether much revenue will be generated since it has been available on VOD.
"The cobbled-together simultaneous release of Sony's The Interview is a Rorschach test. What you see generally tells more about you than it does about the release model of The Interview. Those inclined to believe that simultaneous theatrical and home release is an inevitable point to its $31 million home tally and $5.9 million theatrical take and see a 'game changer.' Some, like me, see a blot," Corcoran said.
Continuing, he added: "Netflix's Ted Sarandos sees a 'great example of what can happen with a big-budget movie if you give them distribution choices. I hope it's eye-opening for the industry.' For once, we agree. So let's open some eyes."