Sony Entertainment Pictures – Recovering from Hacking?
Last year saw perhaps the most high profile cyber-attack in history. Sony Entertainment Pictures were the target, ‘punished’ by hacking group ‘The Guardians of Peace’ for their planned release of the film ‘The Interview’, in which Hollywood stars Seth Rogan and James Franco plan to assassinate North Korean leader Kim Jung-Un. The major media and electronics group were shown the power of the hackers when 47,000 records from employees were compromised and several top upcoming film titles and trailers were released early.
As you will probably remember the film was then pulled from cinemas just before Christmas 2014, amid threats that terrorist acts would be performed and further leaks and hacks committed against the Sony Hollywood Studio. Although the film was later released to Netflix, and a decent amount of cinemas worldwide did indeed decide to share it, the whole scandal left an unfortunate cloud over the company. So 8 months on have they recovered?
Sony claimed earlier this year that the hack from GOP will have cost the studio a mere $15m in terms of ‘investigation and remediation costs’, a small figure that could be easily recovered. Figures have since shown though that the studio was able to make just $40m in digital sales and $6.7m from cinema releases, a dreadful return from a film that cost roughly $44m to make. But moving beyond ‘The Interview’, how has Sony faired since?
Some of the biggest issues have come from the electrical side, with Sony having fallen massively behind Apple in terms of their technology and releases. The Sony Xperia phone range has proved less lucrative than they had hoped, with the PS4 the only real bright side so far this year. This has put a lot of pressure on the film studio; pressure it has not stood up to. From films released in 2015 Sony has only made a paltry $285m. That comes from six movies, none of which can be considered a success.
Interestingly enough the failures of the studio were largely anticipated by former Co-Chairperson, Amy Pascal, who was one of the executives to have her emails leaked during the scandal. Citing future releases as ‘ridiculous’ and voicing concerns about how they would be received, Pascal made what were considered racist remarks about President Obama too. These email leaks were released before the films, perhaps fulfilling a prophecy and therefore partly to blame for the failures of films ‘Aloha’ and ‘Pixels’ in particular.
So in many ways Sony is still reeling from the hack. Whether all the issues it now faces in terms of revenue and success can be directly attributed to the ‘Guardians of Peace’ and their leaks is debateable, but it is also easy to see a trend from that event to now. Soon to be released will be the next in the James Bond series, ‘Spectre’. Always a Box Office favourite, it will be interesting to see whether this becomes a hit and saves Sony’s year. If not then perhaps the hacking scandal has had more of an impact than first thought.