Will YouTube Make Money on ‘The Interview’?

By Paul Ausick Updated Apr 28, 10:39AM EDT · Published Dec 29, 9:10AM EST

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There is an old saying that any publicity is good publicity, as long as they spell your name right. That may apply in the case of “The Interview” from Sony Corp.’s (NYSE: SNE) Sony Pictures Entertainment group, which has become better recognized as a symbol than as a movie.

Could this be the breakthrough that Google Inc. (NASDAQ: GOOG) has been waiting for to light a fire under its attempts to monetize YouTube? Once Sony decided to pull the fill from major distribution after the large U.S. theater chains declined to show the film following threats of terrorism from the hackers, Google saw an opportunity. Google’s chief legal officer wrote on the company’s official blog:

[A]fter discussing all the issues, Sony and Google agreed that we could not sit on the sidelines and allow a handful of people to determine the limits of free speech in another country (however silly the content might be).

Waving the flag of free speech attracted about $15 million in rental fees and purchases for Sony from YouTube, from Microsoft Corp. (NASDAQ: MSFT), which streamed the movie via Xbox Live, and from a dedicated Sony site. Netflix Inc. (NASDAQ: NFLX) passed on the opportunity. Apple Inc. (NASDAQ: AAPL) did as well, but has since made the movie available for rent or purchase through the iTunes store.

At a rental price of $6, that translates to about 2.5 million downloads of the movie. Box Office Mojo reported that 331 independent U.S. theaters also screened the film and accounted for about $2.85 million in box office receipts in the four days since the movie’s release.

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YouTube has streamed movies for several years, but has gotten little mind-share for its efforts. Prospective viewers can find out what’s available on the Movies channel, which has 18.5 million subscribers, compared with Netflix’s total of more than 53 million worldwide subscribers. And where Netflix subscriptions cost $8 or $9 a month, a “subscription” to YouTube’s Movies channel is free and subscribers pay-per-view.

As long as Netflix and Hulu offer an all-you-can-eat buffet for the same price as one or two a la carte items, YouTube will not dent the dominant players’ business. But YouTube certainly made some unexpected revenue from “The Interview” and essentially leapfrogged Netflix’s planned simultaneous release to theaters and online of a sequel to “Crouching Tiger, Hidden Dragon.” All of the major U.S. theater chains have said they will not screen the movie or any others that are released simultaneously on the Web and in theaters (called day-and-date releases in the movie business).

Is “The Interview” a game-changer for YouTube? Due to its unique circumstance at the center of an international kerfuffle, it garnered a lot of attention it may not otherwise have received and a $15 million opening is nothing to print T-shirts over. Still, maybe the folks at YouTube saw something they liked and are even today thinking up ways to leverage this modest success into a real product.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.