The Interview and Film Distribution Models

I’ve intentionally avoided the big story over the past few weeks surrounding the decision by Sony (or was it the cinemas) in the US to pull the screenings of “The Interview”. From the start, there was a clear dissonance within the allegations that were freely flying around. It didn’t help that over the same time period, I was reading more about the activities of the NSA and GCHQ in a book on Edward Snowden. With some of that information playing on my mind, it seemed far more likely to me that someone other than the publicly accused perpetrators had to be guilty of hacking into Sony.

I suspect the full story will come out over the fullness of time. But I also think that we’ll look back in a year or so and view the whole sorry episode as being pretty valuable. Not in a ‘national security’ sort of way but as an indication of the evolution that is still to come within the traditional distribution model within the film business.

We all love the cinema. But we also love convenience and, increasingly in today’s world, I would argue that it is the latter that is proving to be a greater passion for most. And whilst the circumstances surrounding this film were undoubtedly unique, the numbers don’t lie – far more people paid to stream the film online during the first four days of its release than bought tickets to see it at the cinema. Is this the start of a sustained and ultimately successful attack on the ‘windowing’ business model whereby the content owner staggers the release by format type (against the wishes of customers) in order to maximise revenue?

It’s hardly a new approach (I wrote about windowing and the barrage of criticism following Taylor Swift’s withdrawal from Spotify previously) but it’s beyond doubt that there is significant demand out there for same day-releases. The question is whether the existing industry structure can build a model to satisfy this demand – or whether it will take disruptive companies such as Netflix to flex their power and focus their attentions further up the chain in order to start to making the films themselves.

The other thing that has come again to the fore over the past week is the fact that with a US-only film release, Sony managed to shoot themselves in the foot. Did this stop people outside of the US watching it? No, of course it didn’t. It just mean that people turned to torrents instead of paying for it. Again, I don’t blame Sony entirely for this given the unique circumstances which might have justified a cautious and limited release in their eyes. But it remains another example of a company failing to fully address the fact that the release of a digital product that is not global and released simultaneously across countries will be exploited.

I suspect the story’s far from over on this one. And who knows, I may even get round to watching the film one day.