VOD Theatrical releases : Are they viable?

Sony was the first major studio to officially launch a feature intended for a wide theatrical release via VOD.

The result has been an interesting case study for the film industry looking to see whether a VOD theatrical release is a viable business model without traditional distribution.

For the release of 'The Interview', a host of companies came on board to feature the film including Google and VUDU while select indie theaters were able to show the film. It was the first time we really got to see a film marketed for theatre going audiences getting a mainly online-only release.

Simultaneous releasing has been bitterly opposed by traditional theatre chains but with changing technology and user habits we are more likely to see the theater to DVD window getting smaller. Over 70% of American households now have access to VOD services making the demand for content faster and the competition fiercer.

In 2015, TV movies are going to take off in a big way and increasingly compete with big Hollywood blockbusters.

Films like 'The Interview' may find their audiences online, but making the transition to simultaneous releasing is still an unproven formula for the wider industry.

Sony is expected to break-even on 'The Interview' with impressive online sales now passing $31 million. Revenue shares have also been much higher on digital streams which is definitely an area of study in the coming years for studios looking to change their releasing strategy.

It is important to note that the release of 'The Interview' was originally promoted as a theatrical release, not a straight to VOD experience. We don't yet have a comprehensive overview of the returns on a purely marketed VOD release with higher production budgets. What we can see is the market for VOD is going to get bigger but studios have yet to target those audiences.