The REAL reason Sony canceled the release of the movie “The Interview”

The REAL reason Sony canceled the release of the movie “The Interview”

1When Sony’s decision was aired throughout the media yesterday most people thought it was a result of a fear of fomenting terrorist acts. Japan, as well as South Korea and other regional nations well know that the capability of North Korea carrying out terrorist acts on U.S. soil is remote. The regime can make a lot of noise and boastful claims but since 1953 has this country ever been responsible for terrorism in other parts of the world? They are an insular, backward, starving country that will someday see regime change without a shot being fired. South Korea well knows that the threat posed consists mostly of empty rhetoric, oft-repeated claims of setting nations on fire or worse. It never happens. It never will. They are over 60 years past battle-hardened testing, and although hacking might be a hobby for some there, war is not going to be there strong point.

2So just why then did Sony pull this film – a move that will likely cost them at least $90 million in an unfavorable impact to their bottom line? The reason is a bit more subtle. In the past 10 years Japanese companies have been battered by lawsuits originating in the United States. Take a look at a few of the lawsuits that have originated in the United States that were aimed at Japanese companies:

  1. Norman v. Honda

The parents of Karen Norman sued Honda when their daughter died from not being able to escape from her Civic after backing into Galveston Bay. At first, the case sounds somewhat legitimate, until you learn the rest of the facts. For example, the Normans sued Honda because their daughter was unable to hit the emergency release button on the seatbelt. However, she failed to hit the button most likely because she had a blood-alcohol level of 0.17 and shouldn’t have been driving in the first place. The incident happened at 2 a.m. with passenger Josel Woods in the passenger seat. Woods was able to swim to safety. Here’s the kicker: the jury actually awarded the parents with just 25% of the damages considered contributorily negligent. Thus, the Normans basically sued and won against Honda in spite of their daughter’s obvious irresponsibility for driving under the influence. (See more at: http://www.businessinsurance.org/10-ridiculously-frivolous-lawsuits-against-big-businesses/#sthash.f0tZxVuk.dpuf).

  1. The feds reached a $1.2 billion settlement with Toyota Motor Corp. after a four-year criminal probe into the giant Japanese automaker’s handling of a spate of sudden accelerations in its vehicles. The investigation focused on whether Toyota was honest in reporting problems related to the unintended-acceleration troubles, which led to multiple accidents and fatalities. Toyota faces hundreds of lawsuits over the acceleration problems, which gained public attention after the deaths of a California highway patrolman and his family that were reportedly caused by the unintended acceleration of his Lexus, which is made by Toyota.

Starting in 2009, Toyota issued recalls for more than 10 million vehicles for various problems, including faulty brakes, gas pedals and floor mats. From 2010 through 2012, Toyota paid fines totaling more than $66 million for delays in reporting unintended-acceleration problems.

The National Highway Traffic Safety Administration never found defects in electronics or software in Toyota cars, which had been targeted as a possible cause by many, including some experts.

  1. Takata Prepares To Take $440 Million Hit From Airbag Recall

Reuters reported that Takata airbags, which found their way into 4 million Hondas, Toyotas, BMWs and other cars worldwide, will likely result in a major loss for the company going forward. This one is just the latest.

3There are many more examples of U.S. based lawsuits against Japanese companies that in spite of flimsy, scant and even highly questionable evidence, have resulted in monumental judgments the Japanese companies have had to pay in order to continue to do business in the United States. Japan is a country lacking natural resources, unlike North America, Africa, China and South America. They must export in order to survive. So pay they will.

If “The Interview” was released into U.S. theaters on Christmas Day, and so much as an unrelated incident of harm occurred to any movie-goer, Sony would be sued and sued for a lot of money. The plaintiffs would likely prevail given the fact that Sony had duly been provided ample warning that such a terrible outcome could be expected.

4The U.S. is a litigious society. If you are scalded by hot coffee you purchased from McDonald’s you can make a lot of money by suing. In fact, Americans spend more on civil litigation than any other industrialized country, according to a study in the Economic Journal – and twice as much on litigation as on new automobiles.

So just why did Sony pull their upcoming film “The Interview?” Had they not, they anticipated far greater than $90 million worth of settlements from lawsuits blaming them for anything even remotely connected to someone getting hurt in a U.S. movie theater while watching this particular movie. The decision was based upon a cost-benefit model, and the business decision was probably a good one.

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