Sony's new web-to-DVD business model

Although most insiders expect online video consumption—whether it’s episodes of TV shows or original webseries—to rival that of the television set over the next few years, nobody has yet found a way to generate meaningful revenue from Internet video. Both independents and media giants alike have experimented with different approaches, from graphic ads to thirty-second commercials to iTunes, but the gains have been insignificant compared to traditional television. lonelygirl15 and KateModern were exceptions, in that both webseries were able to utilize product integration as a source of revenue, but few other Internet endeavors have had much success. Still, everyone keeps trying.

Sony Corp. can now add its name to the list, as the Wall Street Journal is reporting that the conglomerate plans on launching a new webseries, Angel of Death, next year with plans to then release a DVD version (with extra features) once the show’s Internet run has been completed. “If you can figure out some ways to plug (web programming) into traditional business models,” Sony President Steve Mosko tells WSJ, “maybe you can make high-quality work for the Internet.” In this instance, the “traditional business model” is direct-to-DVD movies, an industry that has proven to be popular as of late. And with an approximately $1 million budget, Angel of Death actually comes in cheaper than most direct-to-DVD offerings. The trick, of course, will be to build the necessary buzz and interest in the DVD, something Sony believes a strong Internet presence for the webseries can accomplish.

Sony plans on releasing an additional four-to-six webseries next year using this new Angel-of-Death business model. The DVD extras are expected to be additional scenes that tie the storyline together more tightly, turning the bit-size webisodes into a more traditional motion picture. In this way, Sony believes the end-product can even be sold overseas as TV movies-of-the-week. “We’re not expecting to make all our money back in that initial (online) window,” another Sony exec, Sean Carey, adds. And maybe that is the right approach to have; after all, major motion pictures make the bulk of their revenue through DVD sales and international rights, just as television shows do through syndication. No one distribution method is enough for any medium these days, so why wouldn’t the same philosophy hold true for Internet content? In any case, Sony’s experiment will be interesting to watch.

—Anthony Letizia (June 17, 2008)

 

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