Cowards! The four largest movie theater chains in the United States—Regal Entertainment, AMC, Cinemark, and Carmike Cinemas—have decided to yank Sony Pictures’ new movie, The Interview, from theaters after people claiming to be hackers posted threats online against them. The decision makes little sense on safety grounds since the Department of Homeland Security has deemed the threat not credible. It's also a terrible business decision—and a massive missed opportunity for one of the companies to gain a much-needed economic edge over the others.
Last week, people hacked into the Sony computer system and released a massive amount of emails and documents. The hackers are believed to be connected with North Korea in some way, although there is little actual evidence to substantiate that accusation. On Tuesday, the supposed hackers made threats against theaters showing The Interview, which stars Seth Rogen and James Franco as two television journalists who are drafted by the Central Intelligence Agency to kill North Korea’s leader, Kim Jong Un. All threats should be taken seriously, of course. But the Department of Homeland Security said Wednesday there is "no credible intelligence to indicate an active plot against movie theaters within the United States."
No matter, the theaters were spooked. On Tuesday, Carmike Cinemas informed Sony that it would not show the movie. On Wednesday morning, the three other chains reportedly made the same decision on a conference call organized by the National Association of Theatre Organizers. Later Wednesday, Sony announced that it wouldn't release the movie at all.
A predictable backlash followed:
Dear movie theaters running scared from an unlikely threat from anonymous hackers over The Interview: Have you always been wusses?
— John Schwartz — NYT (@jswatz) December 17, 2014Was horrified journalists would buckle to Islamists threats over cartoons.But movie theaters buckling to North Korea? http://t.co/bx2GVWF34B
— Michael C Moynihan (@mcmoynihan) December 17, 2014movie theaters: bok bok bok http://t.co/CUh5Ae7Fy3
— Arthur Delaney (@ArthurDelaneyHP) December 17, 2014This is the type of attention that the movie theater industry really doesn’t need right now. People, especially young people, are attending fewer films in theaters because of high ticket prices and the easy availability of other entertainment options. The New York Times succinctly summarized the challenges facing the industry Tuesday:
The Nielsen Company said last week that the moviegoing of Americans age 12 to 24 dropped 15 percent in the first nine months of 2014, compared with the same period a year earlier. Total attendance has declined about 5 percent so far this year compared with last, according to box-office analysts, because of fewer broad-appeal films and about a dozen more modest movies, like “Sex Tape” and “A Million Ways to Die in the West,” that missed the mark.
In these tough economic conditions, the top theaters are trying to find any way to attract new customers. AMC, for instance, is teaming up with MoviePass to offer a monthly subscription that allows people to watch one movie in theaters every day for an entire month. The company is hoping that will build stronger brand loyalty and draw a younger audience into their theaters. The companies are looking for any slight edge over each other to grab a larger share of the market.
That's what makes the decision to not show The Interview such a missed opportunity for one of the four major chains. If one had shown courage and decided to show the film, it would have received significant positive press coverage while also facing little competition for people who wanted to see The Interview over the holidays. It was the perfect opportunity for one of them to stand out. And all four blew it.