Sony’s decision was not because of risk, it was due to strategy and qualitative data drivers.

In an industry which lives and dies on sentiment and consumer animal spirits (cinema)where so much of the success of a product line concentrate during holiday seasons, Sony was already positioned at the extreme end of the risk/reward calculation even before recent events.

The delivery system for on screen films also adds the element of contagion for the multiple products on offer in the same facility.  The exhibitors could not take any risk at all.  The distributors could not tolerate any risk at all.  The producers could wait for another day or another distribution channel for this one film. I am sure there are some insurance coverages (I know that you can hedge the weather), but the industry as a whole wants the theaters filled with happy snack guzzling patrons  every December.  Any threat to that formula has extreme multiplier effects.

Deconstructing the case study (still in progress) is easy.  A product which historically would have been released as an independent film or perhaps a ‘boutique’ was pushed down the holiday highway with big film marketing.  Saturation advertising and personal appearances by the cast, accompanied by snarky comments about the potential politics.  The development, marketing, and delivery strategy was 100% revenue maximization without concern for risk.  What were they thinking?

In restrospect we always were critical when we ported analogs from our personal lives to our businesses. What about the reverse?  How many of us have bundled our personal activities into one basket – at risk for the black swan…..