The Sony Pictures hack and the implications for brands

The cyber hack of Sony Pictures will have many more implications after the embarrassing headlines about revealed emails die down.

Under substantial and serious threat from cyber hackers, who had evidently exercised their opportunities  to cause pain to Sony Pictures, the brand was left with the decision on whether or not to scrap the release of the film, The Interview. With the premiere abandoned, Sony went to the theaters to test their mettle against the threat of the hackers. Understandably the theaters weren’t looking for an escalation of the pain and, consequently, Sony Pictures has decided not to release the film, for the time being at least, though it’s considering other formats. Interestingly, it could be argued that interest in the film has been piqued by this episode, particularly as the drama of the episode is potentially maximized by possible mysterious North Korean involvement, so while Sony will clearly lose out in the box office, the film could do well in downloads/DVD sales.

Sony Pictures can justify its decision not to release the film in cinemas on the basis of asking a key set of its own stakeholders, the theatre owners, so the decision is based on consensus and, therefore, is representative. This has been a tough episode for Sony Pictures with significant commercial implications. But what are the lessons and implications for all brands and what would other brands do in similar circumstances?

Well, clearly all organizations will now be taking data security much more seriously than they may have done in the past, but the decisions and duress that Sony Pictures has been forced to go through are much more akin to the governmental policies than any corporation may have previously have conceived. Indeed, U.S. President Barak Obama is now commenting from the sidelines that he wishes Sony had been in in touch with him as he’d have advised them against ever giving into extortion.

But now that Sony has made its decision, is it reasonable to expect that many more hackers will be encouraged to extort brands? Brands will now have to decide how they’ll respond to such threats, and the public’s approval or disapproval of their policies will affect their relationships with the brand in hitherto unforeseen ways.  These are very difficult decisions to navigate that, in happier times, felt much more remote to businesses and brands. There are profound commercial implications and often decisions are required extremely quickly, so policies need to be premeditated. The public is used to governments having set in stone, and even broadcasting, their policies about negotiating with many forms of terrorism and this will set a precedent in their minds that create their expectations of how commercial organizations should or shouldn’t respond to threat.

At Interbrand, we often talk about brands as being the business strategy brought to life. These sorts of policies become yet more evidence of the tangibility of brands and the behaviors they exhibit – having profound implications on our sense of whether we endorse their actions and feel a kinship with them, or whether we disprove of their responses.

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