Sony Sees Holiday Domestic Box Office Losses
Sony Sees Holiday Domestic Box Office Losses
With a modest budget of $44-M, “The Interview” was estimated to gross around $30-M in its opening weekend. Box Office Analyst, forecast that Sony (NYSE:SNE) could have grossed $120-M in US and foreign box office revenue from the film. It has spent tens of millions on marketing.
The losses represent a single movie flop, and a spreading corporate disaster. Revenue from Sony Corp.’s “pictures” business totaled JPY830-B ($7-B) last FY (fiscal year).
A leaked script of the Sony’s upcoming James Bond film “Spectre” led to an online frenzy of articles warning readers of “major spoilers.”
Seth Shapiro, a professor at the University of Southern California’s School of Cinematic Arts, thinks the potential damage from a hit to the blockbuster franchise is big.
“How can they proceed if everyone in the audience has already read the script?” he said. “You basically need to start over and see how much you can salvage.”
Others disagreed, noting that people flooded to movies like “Titanic” though everyone knew the ending. And they question how many people would pore through details of the script anyway.
“Most people do not read scripts,” said veteran publicist Howard Bragman. “The Bond movie is going to do just fine.”
It is not yet clear if the leaks of sensitive emails will cause agents and top actors to think twice about working with Sony.
In the short term, some think it may hurt, not only because of the insults directed at stars such as Angelina Jolie, but because the massive leak hurts prestige and indicates Sony is not being run as well as it should.
“Studio people are always saying negative things about talent,” said a marketing professor at University of Southern California’s Marshall School of Business. “Ultimately it is about business,” he said. “That will outweigh the insults.”
But all bets are off if Sony decides to reshuffle the top executives at the studio.
Some speculate that co-chair Amy Pascal’s job is in jeopardy due to the insensitive nature of some of her remarks in emails.
In an industry based on relationships, major changes at the top can affect projects for years. If the fallout leads to large scale changes at the senior executive level it will have a effect for several years since it brings to halt most movies currently in development.
Projects have to be written off, replacement executives hired who will have their own ideas of what movies should be made , and the costs could easily get into the hundreds of millions of dollars for Sony.
Earlier this week, 4 former employees sued Sony for not protecting their private information from hackers. The lawsuits seek class-action status on behalf of the nearly 50,000 Sony Pictures employees whose Social Security numbers and other private data was exposed.
Legal experts said the cases are likely just 2 of many that will be filed over the data breach.
A review of 32,000 emails from the inbox of Sony Entertainment CEO Michael Lynton that were dumped by the hackers Monday showed the studio suffered significant technology outages it blamed on software flaws and incompetent technical staffers. Hackers targeted executives to trick them into revealing their online credentials.
The files expose lax Internet security practices inside Sony such as pasting passwords into emails, using easy-to-guess passwords and failing to encrypt especially sensitive materials such as salary and revenue figures, strategic plans and medical information about some employees. Experts say such haphazard practices are common across corporate America.
Security experts said that the current hack would have breached 90% of companies’ defenses. And that having already suffered a major hacking, Sony should have been among the 10% not hackable.
This does not look good for Sony, after all is a technology company.
Thursday, Sony (NYSE:SNE) shares finished +.75, (+3.68%) at 21.14 against a 52 wk trading range of 15.23 – 22.32.
|HeffX-LTN Analysis for SNE:||Overall||Short||Intermediate||Long|
|Bullish (0.25)||Neutral (-0.15)||Very Bullish (0.52)||Bullish (0.39)|
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