Was SONY Right to Pull the Picture?

I have some significant experience in dealing with corporate crises for clients involving foreign companies and foreign countries, so I know full well how frustrating it can be. Much of the time, the crises involve economic espionage (a federal crime since 1996). The similarities with the SONY case are striking, with one major difference: the foreign governments or companies that hack into my clients’ computers or otherwise steal their intellectual property are not interested in publicly releasing the information: Quite the opposite. Their goal is to profit from the theft in secret, and without having to spend substantial R&D dollars on new products.

Discussing this last week, the question would have been framed: Should SONY go ahead with its planned release of the movie, “The Interview”, the devil be damned, full speed ahead? Or, should the company give in to the blackmailers’ demands?

It’s never easy to capitulate to a blackmailer’s demands under any circumstances (we have experience with these types of crises, as well), but before entertaining any decision on that point, we would first have to know (a) the threat is real, and (b) that acquiescing will negate the threat. SONY made a decision without either of these two critical conditions being satisfied, and that’s a mistake and a problem for the studio. The crisis, then, has not been negated, it only has been tabled, with more than a 50-50 chance it will rear its ugly head again down the road, now that the hackers/blackmailers see how easy it is to bring a company to its knees without firing a shot. But kicking the can down the road is not a sound crisis management strategy

We would have tried first to reach out to the “Guardians of Peace” – whose peace, by the way? – to negotiate a “cease fire.” If – a Big “If” – a dialogue can be established, anything is possible. Assuming North Korea is behind the threats and the leaks (which is our government’s position), I would reach out to Dennis Rodman, Kim Jong Un’s BFF, and use him behind the scenes as an intermediary. And, it’s not too late. There still may be certain compromises (e.g., edits to the film, money changing hands, etc.) that could be made that would satisfy the hackers. In 1991, the Catholic Church objected to a film called “The Pope Must Die.” Under extreme pressure, Miramax studio changed the title to “The Pope Must Diet”, which made no sense and the movie opened and closed almost contemporaneously.

A better analogy is the 1940 film, “The Great Dictator,” a roman à clef lampooning Hitler and Mussolini just as the two of them were coming to power on the eve of World War II. Nazi Germany and Fascist Italy pressured writer-director-star Charlie Chaplin and his studio, United Artists, not to release the film under threat that all U.S. movies would be banned throughout Europe, which Hitler controlled. Chaplin, head of his own studio, would not back down and nothing ever came of the threat.

Sony kept painting itself into a corner because they were shell-shocked by crisis events and never got a handle on the crisis. They allowed themselves to be whipsawed back and forth and never exercised any possible options to resolve the crisis. Early on the studio narrowly viewed its crisis solely as leaked e-mails as a result of the hacking. Having Sony’s well-known lawyer, David Boies, threaten the worldwide media and demand that they delete the emails rather than make them public was the most ridiculous Quixotic threat in years. It only served to make the studio even more vulnerable. The media will always report what it considers news. You may as well demand the sun not shine tomorrow. But as even Little Orphan Annie knows, the sun will come out tomorrow.

Leaked emails was never Sony’s actual crisis; that was merely its embarrassment. The real crisis was its eye-to-eye confrontation with a regressive regime, and Sony blinked. It was a quintessential damned-if-you-do/damned-if-you-don’t conundrum.

Anytime you have the President of the United States publicity chastising you for a decision you made, you know you’re in the tall weeds. But here’s the thing Sony’s critics conveniently overlook: If you bear in mind who’s running North Korea, the threat of a September 11 event when the movie opened on Christmas day can’t be cavalierly dismissed. Looked at another way, who would be responsible if movie-goers were killed just by attending the film? Have Sony’s critics already forgotten the 2012 movie theater massacre in Aurora, Colorado.

In the end, SONY’s decision was made for them when a number of large movie theater chains (e.g., AMC, Regal) announced they were not going to show the film because of the so-called “Christmas Surprise” card, interpreted to be a threat of violence in or at theaters showing the film. So SONY can try to save face by saying it didn’t capitulate to blackmail demands; it was the theater chains that folded. 

In the end, SONY’s decision was made for them when a number of large movie theater chains (e.g., AMC, Regal) announced they were not going to show the film because of the so-called “Christmas Surprise” card, interpreted to be a threat of violence in or at theaters showing the film. So SONY can try to save face by saying it didn’t capitulate to blackmail demands; it was the theater chains that folded.

But that’s not really a crisis solution. SONY may have to write this one off and suffer ignominious defeat, understanding that no matter what it does, more embarrassing emails will most likely be released anyway. So the studio will wind up with only more egg on its face, instead of (potential) blood on its hands.

Of course, if Sony gets more proactive – and the U.S. offers some sort of intelligence support – Sony can and should still release the film, maybe not in theaters, but certainly streaming is a possibility.

In every crisis, there usually is an opportunity for someone. In this case, every other studio has been put on notice: they could be next. Beef up your firewalls and start deleting embarrassing emails…NOW! Because in today’s crazy world, you never know what some lunatic might object to.