‘The Interview’ May Inspire a New Business Approach

January 7, 2015 Updated: January 7, 2015

LOS ANGELES—”The Hobbit: The Battle of the Five Armies” has stolen the show the third week in a row since its release on December 17. The recent weekend receipts of $21.9 million drove up its domestic total to $220.8 million at the box office, according to Rentrak, a box office revenue tracking service. Yet not all that surprisingly, the talk of the town remains the “The Interview,” the controversial comedy—hyped variously as “screwball,” “over-the-top” and “raunchy”—about two puerile, toilet-mouthed newsmen enmeshed in a plot to assassinate the real-life president of North Korea Kim Jung-un.

After “The Interview “grossed $2.8 million the first weekend of its limited Christmas Day release to 331 theaters nationwide, it tumbled to just $1.2 million the second weekend.

Despite low box office receipts, not all is bad news for “The Interview.” SONY Pictures, distributor of the film, may have charted new ground in movie releases. Sony reported on January 6 that its video-on-demand (VOD) with Google Play and YouTube is booming, having made $31 million to date. Viewers have the option to rent online at $6 a stream or $15 to own. Industry analysts consider this way of rolling out new releases the harbinger of future feature film releases.

Patrons wait in line to see
Patrons wait in line to see “The Interview” at the Valley Art theater in Tempe, Ariz., on Dec. 25. (AP Photo/Alina Hartounian)

VOD may thus awaken cinema operators to imaginative ways to keep customers streaming to movies at their cinemas as opposed to them streaming movies online, lest movie houses become archaic in the way of bookstores and travel agencies and other brick and mortar establishments. In this digital day and age, stay-at-home technology that circumvents the hassles of fighting traffic, standing in long lines, and freezing one’s derrière in some cases, or dealing with other people’s annoying habits, movie operators might be tempted to jump on the bandwagon to reinvent the way they do business.

Operations have already begun in some corners of the movie entertainment world, namely, at so-called luxury theaters, to not just show movies on the big screen but to create “evening out” experiences.

Harry Aslanian is the executive director of operations for the luxury MGN Five Star Cinema, in Glendale, Calif. He thinks that the cinema can expect to remain as popular as ever. “People still want to see it [a movie] on the big screen. They can come with a date or the family and relax,” he said.

An outing to a movie is “a film experience,” Aslanian claims, “beyond just seeing a movie.” This translates to pampering movie-goers much the same way airlines do first-class customers. Aslanian notes the many upscale amenities of theaters like his, including reclining leather seats, spacious leg room, unobstructed views of films, and upscale food and beverage in-seat service. Tickets come at a premium, too. The cost of “The Interview” at MGN, which also has a cocktail lounge and a restaurant, is $19.50. And coming soon is a matinee entrée: Sunday brunch.

Change in viewer preferences in the air or not, movie aficionados can expect to still enjoy the tradition of going out to the theater.

Tom Hunsucker and Hazel Octa ventured 43 miles from Rancho Cucamonga to Glendale to see “The Interview” in spite of terrorist threats by a group calling itself Guardians of Peace, based in the impoverished African nation of Burundi. The publicity over the hacking incident also piqued Hunsucker’s curiosity, whereas Octa stated the draw of Seth Rogan in her coming out.

The twist and turns stemming from “The Interview” may have delivered an epiphany to cinema owners that diversification of portfolio is a prudent path to survival.

For Hunsucker, there was nothing extraordinary about this movie. “Just a comedy,” he said, “[that] makes fun of a dictator—a moron.”

Many are apt to side with Hunsucker, who also opined that North Korea’s alleged role in the cyber attacks was “a shot in the arm” for publicity for “The Interview.”

Although North Korea’s involvement has been widely debunked, the Obama administration is sticking by its guns. Just last Friday, January 2, President Barack Obama signed an executive order imposing new sanctions against North Korea, whose actions, Obama said, were “provocative, destabilizing, and repressive.”

Nonetheless, the twist and turns stemming from “The Interview” may have delivered an epiphany to cinema owners that diversification of portfolio is a prudent path to survival.

According to Forbes, companies that diversify, namely, listen to their clients, are more apt to remain competitive. The magazine reports that gasoline stations, for instance, derive little profit from petroleum sales but from the diverse assortment of products on the shelves inside the shop. Likewise, Philip Morris, Inc., the reviled tobacco giant, remains healthy due to holdings in food, beverage and financial services. Another diversification example is Sears, which got into optics and insurance awhile back, and is still around; not so for its erstwhile competitor Montgomery Ward, which did not heed trends, says James Hines, a senior reporter for Direct Marketing News.

It’s been said that when life presents lemons, make lemonade. It may not be that stark of a challenge yet, but the recent event of streaming new releases online is not lost on cinema operators, to be sure, who may want to find a way to spin straw into gold.