THE BLOG
12/23/2014 09:14 am ET Updated Feb 20, 2015

It's the Hard Knock Life for Sony. So Everyone Needs to Calm Down

I saw the Annie movie this weekend. The Sony film is a wonderful, contemporary version of the Broadway musical. I recommend that everyone take their family to enjoy it this holiday season. While listening to the song, It's the Hard Knock Life, it was difficult not to think of Sony's predicament resulting from its decision to greenlight, The Interview.

[ORPHANS]
It's the hard-knock life for us!
It's the hard-knock life for us!
[ANNIE]
'Stead of treated,
[ORPHANS]
We get tricked!
[ANNIE]
'Stead of kisses,
[ORPHANS]
We get kicked!

Sony's situation is a case study in extreme measures; some beneficial, but most not so much. Nearly everyone involved needs a time out. Panic and demands for instant fixes have been running far ahead of common sense.

Let's start with Sony's decision to greenlight the film, The Interview, which is a story about two television executives recruited by the CIA to assassinate the leader of North Korea. Was the story a bit risky? Sure, but we want our creative community to push boundaries. That's what the community is expected to do...take risks. It would be hard to fault Sony for this when the creators of South Park had previously parodied prominent religions and government officials including the senior Kim Jong ll, the father of the current leader. Reports of Sony executives raising concerns about the film beforehand, and the creators attempts to adjust the film's ending to address their concerns, are all a good thing. It demonstrates that those involved were aware of the potential backlash and were attempting to adjust. Good for Sony! That's what we would expect from our creators.

North Korea's actions were even more extreme...and stupid. These included their decision to hack Sony's computers, make them inoperable, disseminate confidential materials, and threaten the studio and theaters if they released the film. While it had a chilling effect on Hollywood short term, the long term consequences are not in North Korea's favor. The film now has more awareness and interest than ever before, thus having the opposite effect than North Korea intended. And it will be seen one way or the other by millions across the globe. The political ramifications are even worse for North Korea via added sanctions and scrutiny. This is a long term loss.

Sony's decision to give theater owners the option to back out of their contract, and the theater owners decision to do so, was extremely shortsighted and based upon fear. While they did so out of an abundance of caution, something we need to recognize as a good thing, they did not think hard enough about the consequences of free speech and the backlash from the creative community.

President Obama's decision to admonish Sony for pulling the film came far too late. This is a case of extreme procrastination. If he had acted sooner by giving early support for Sony and encouraging them to show the movie in the face of threats, he would have given them the political cover (and perhaps legal cover) they desperately needed. But he failed to act soon enough.

Various voices are now asking for Amy Pascal and Michael Lynton to be removed as heads of Sony Pictures. That would also be extreme and shortsighted. Over their tenure, they have increased the annual revenue of the studio to $8 billion, resulting in hundreds of millions of dollars in profit during the last fiscal year. Do you really remove studio heads because of a decision to make a film that costs only a little over $40 million to produce and perhaps $20 to $30 million more of sunk marketing costs? No...you don't. If that was the case, every studio executive in Hollywood would be fired. New studio heads also throw projects in development into upheaval, creating even more turmoil. Nor can you fault Amy and Michael entirely for their computer system being breeched. That could have happened to any studio...even though there were earlier indications that their system wasn't ideal. No system is.

Some even suggest that Sony should get out of the movie business? Another extreme thought...and dumb again. The movie unit is one of Sony's bright spots. Their real problem of late tends to be consumer electronics.

Everyone needs to calm down and think about the long term. The studio is sitting on a goldmine called The Interview which now has more awareness and interest than it would have had without the controversy. Sony should release it to theaters now that they finally have political cover from President Obama and the threats have been deemed unsubstantiated. Theater owners should jump on board. Audiences will quench their desire to see it. The creative community will be satisfied and Sony will once again be in their good graces. The world will see that free speech trumps all and that we do not yield to threats. Sony can then spend time creating a world class security structure and resolve their dispute with the employees who seek damages for their private information being made public.

Think for the long term Sony, don't give in to short term thinking and extreme measures, and you will discover what Annie already knew to be true, that the sun will come out tomorrow.