IT'S COMPLICATED

Hollywood is furious and Wall Street is relieved that Sony canceled “The Interview”

Sony is being slammed by Hollywood stars and other high profile personalities for its decision to pull The Interview from theaters.

The reaction among investors could not be more different. Sony’s US listing is up strongly today (up 3% at the time of writing) and the stock chart certainly does not reflect a company in crisis.

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This might seem surprising given Bloomberg has calculated that the whole sorry episode could cost Sony $200 million. The reality is, Sony could have lost a lot more in lawsuits and damages if it had stubbornly proceeded with a release and something bad had happened. Macquarie Securities told clients this week it was not sure whether any commercial, general-liability insurance policy Sony might have would cover it against potential claims. (It also is worth noting that the Japanese conglomerate generated nearly $80 billion in revenue last year, with its entire film business only contributing about 10% of that.)

It’s easy to criticize the company from behind a keyboard. But as the New York Times points out, with US law enforcement having linked the hackers to North Korea, even the Obama administration is facing a really tough decision on how to respond. “Some within the Obama administration argue that the government of [North Korean leader] Kim Jong-un must be confronted directly. … Other administration officials said a direct confrontation with the North would provide North Korea with the kind of dispute it covets,” the Times reported.

Complicating matters even further is the fact that Japan, where Sony is based, is worried that a flare-up of tensions could threaten negotiations over the release of its citizens captured by the regime.

For the movie studio in the middle of all this, pulling a film and letting the hackers win was a difficult call, no doubt. But in the end, it was the only choice worth making.

And besides, it’s possible the film eventually will see light of day—if not in theaters than perhaps online. As Forrester Research analyst James McQuivey argued, “Sony should fight fire with fire. Rather than trying to get the movie into movie theaters, it should be posted all over the web—letting the whole world see it, for free, in HD.”

Read this next: Hey, Netflix: Be a hero and buy “The Interview” from Sony

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