A DVD sales deal will be based on BO and the studio sees a much smaller piece of that action. Foreign will be very limited and will likely not be too sweet a deal for the studio either. No one will see a dime more than he already has if this doesn't do in the $50mil range domestic BO (unless the stars have a deferred position out of dollar one of the gross).
I think it's probably going to make some money -- not a blockbuster type money, but enough for "proof of concept" that small movies targeted to a specific audience can turn a profit. Remember the movie Affliction? Same kind of deal.