Repost: Why The Interview Release Debate Explains Everything Wrong with Sony

(reposting this from Medium)

There are a lot of posts (here, here, here are a few examples) in the last day about whether or not Sony Pictures might seize the day in the midst of their current hacking crisis. I’m talking specifically about the idea that The Interview could be released online now that hacker threats of physical violence have caused most theater chains refuse distribution of the film.

They apparently won’t.

This is a massive missed opportunity not only for Sony Pictures but for all of Sony. The last few years have seen Sony, outside of perhaps the Playstation group, continue to lose it’s luster as an innovator and industry leader. The insular leadership of the company has missed major trends (iPod vs Walkman, mobile vs laptop, Blu-ray vs streaming) so often that it’s no longer considered an innovator in the same category as Apple or Microsoft. That’s despite Steve Jobs driving Apple to focus on design and product innovation like Sony when he returned to Apple.

I’ve heard several ideas from my former Sony Pictures colleagues as to why this won’t be the case even though Sony seemed to be considering it just a few days ago. Distilling the major themes down, they fall into a few categories:

They want to sell it to another distributor
This one is the least likely because it means Sony thinks this film is so toxic after the hack that they want to get rid of it and that there’s a buyer in Hollywood who believes they could withstand whatever potential hacks might by thrown at them. Given that the investigation now seems to indicate the hack is the work of North Korean state sponsored cyber-terrorists, who would want the hassle and risk to their business at any price?

There are licensing window issues that prevent releasing on VOD right now
Now folks outside the entertainment industry might not get this, but inside Hollywood this is a big deal. The reason that movies come out first in theaters, then in premium pay per view, then for purchase online or as Blu-ray and finally as rentals or streaming on subscription services is all about windows. Windows determine when a film can move from one stage to the next and within a given window it often can’t be distributed in other formats. That’s to protect say a theater owner who wouldn’t want to be showing a movie while it’s available for you to download to your phone for less money than a single adult admission. I doubt this is the reason, but having seen the complexity of content window management up close I can at least understand it.

They want to claim it’s a complete loss and seek an insurance claim
Strangely enough this one seems to me to be the most plausible — Sony has lost a lot of money in the potentially wasted production of the film and stands to lose a lot more when the employee and former employee privacy and identity theft lawsuits hit them. It also seems the most plausible because Sony, top to bottom, has been managed by financial engineers instead of product engineers for years. Throwing away a golden opportunity to highlight the strength of it’s online distribution network through Playstation as well as partnerships with companies like Netflix in favor of a short term insurance payout seems exactly what a financially driven company would do.

They are idiots
So now we come to the real reason. Sony won’t release The Interview because they are just not driven enough to make it happen. There’s no leadership at Sony anymore, not in the same way that Morita-san created the great worldwide brand based on quality and design. Sony has enough money and lawyers to solve any licensing issue or contractual window restriction that stood in the way. While the cost of lawsuits and recovering the IT infrastructure from the hack will run into the millions, think about the earned media (aka word of mouth) brand value that would be created by going online to show the movie “North Korea does not want you to see”? You can’t buy that kind of positive media coverage and that’s certainly what Sony needs after a month of horrible disclosure after another.

By taking a top tier feature film that is not the poor quality “straight to video” product and putting it online everywhere they could not only send a message about the renaissance of Sony, but of the resilience in the face of aggression and cyber-terrorism. Sony could do this and earn something more than money, they could earn the respect of the entire world.

Too bad they just want the insurance check.

Published by Steve Banfield

Kentucky born, Seattle based. Entrepreneur. Team Builder. Photographer.

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