Hot for “Bad Teacher”: Sony Spikes Sales With Early Offers on iTunes, Amazon

Published on November 30, 2011
by Peter Kafka

Hollywood is trying to figure out how to get people to buy more movies instead of renting them. Sony might have an answer: Sell the flicks on iTunes, Amazon and other digital outlets before viewers can buy or rent them anywhere else.

Sony tried doing this with “Bad Teacher” last month, and the results sound encouraging for the studio. It says its “windowing” experiment boosted digital unit sales by 60 percent, and overall digital revenue by 24 percent.

That is: Most people prefer to rent a movie than buy it outright. But when offered the chance to pay for a download or wait a couple weeks to rent the movie, some folks paid up.

Digital sales of “Bad Teacher” make up a small percentage of the movie’s overall digital revenue (Sony won’t release actual sales numbers), but there’s a lot more profit in each transaction for the studio. Rentals via iTunes run from $3.99 to $4.99 for the Cameron Diaz vehicle, but sales run from $14.99 to $19.99 a pop.

More good news for Sony: It says demand for digital rentals didn’t seem to drop once they became available two weeks after digital sales started. And physical sales — still the most important source of income for the studio — don’t seem to have suffered, either.

That last point is crucial for Sony’s relationships with the retailers it counts on to move old-fashioned discs while stepping into digital at the same time. Retailers like Wal-Mart and Best Buy are selling Sony’s movies via digital outlets, like Wal-Mart’s Vudu, but they won’t do it at the expense of their brick-and-mortar business (yet.)

“The good news that encourages us is that the physical retailers, those are the guys that are playing well and getting good results out of this,” says John Calkins, who heads up digital for Sony’s home video unit. Calkins figures that the promotion for the early digital sales ended up working as marketing for all of the movie’s sales, and thinks that will work with other films, too.

Calkins just tried the experiment again, with “30 Minutes Or Less,” and says that comedy saw similar results. Calkins says he’ll try it one more time in 2011, with a movie he won’t disclose.

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