How Much Will Cancelling The Release Of THE INTERVIEW Cost Sony?

Any movie is an expensive proposition for a film studio, so to just walk away from that expense without attempting to make any of it back is a rather big thing to do. And while The Interview is not the most expensive film on Sony Pictures’ slate this year, shelving the film in response to terroristic threats from the hackers who broke into the studio’s computer system three weeks ago against theaters who would show the film is going to cost the studio in the neighborhood of $90 million dollars.

The Wrap is reporting the price tag for cancelling the film across all platforms – theatrical, video on demand and home video – is calculated from the following costs.

A production budget of about $45 million;

A domestic marketing budget of $35 million;

An overseas marketing budget estimated between $10 million to $12 million.

The studio may be able to save somewhere around $5 to $6 million in cancelled ad buys over the next week leading up to the planned Christmas Day release.

As for why Sony hasn’t looked to video on demand as an alternate release, some are suggesting that if they shelve the film entirely, the insurance that is taken out on every film will pay off in full, and the studio’s loss on what they’ve paid out so far won’t be as bad. But it doesn’t make up for any of the potential revenues the comedy would have brought in.

The Interview was tracking for a $25 million opening weekend, with the studio projecting domestic grosses of approximately $80 million overall with an additional $130 million worldwide. And that’s before any secondary revenue streams such as streaming and home video revenues are added in.

But the proceeds on the film aren’t the only losses that Sony is facing. There are also the costs involved in rebuilding and re-securing their computer systems, lost production deals, further cancelled projects and possible legal judgements in the number of lawsuits that are starting to be filed against the studio by former employees over the release of their personal information.