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Sony Movie Profit Destroyed by Cyber Attack

sony-cyber-attack

Sony was hoping for another comedy hit in their stocking this Christmas. Maybe they will get the box office magic they are expecting from the Seth Rogen – James Franco comedy “The Interview.” But any profit will be mitigated by the fact that they are getting annihilated by a cyber attack that has opened the books of the company in an unprecedented way.

Reporters are saying that “it’s very clear” a nation state has committed this cyber crime. Some tech experts are blaming the Sony hacking scandal on North Korea.

Why would North Korea care about another slapstick yuckfest from these guys? Well, the plot of the movie is simple: Two reporters are hired to interview the head of North Korea. Then the CIA recruits the idiots to kill him. Hijinks, reportedly, ensue.

While most nation states would look at that plot, roll their eyes and get on with life, North Korea is NOT most nation states. First, they are totalitarian in every sense of the word. Next, their leader is not a political official. He is revered as a deity. In fact the current leader, Kim Jong Un, is the third in a theocratic line. Folks over there don’t take too kindly to anyone poking fun at their godlike president.

Of course, all that could be nonsense speculation. Nobody is currently certain who pulled off the worst cyber attack…ever. Well, at least nobody who is talking to the media. Somebody certainly knows. And that somebody could include various nations’ cyber crime organizations.

But that’s neither here nor there, really. The real lesson for everyone here is that you truly don’t know who’s listening in when you do what you do online. Could almost literally be anyone. Including a national government with a chip on its epaulette-bedecked shoulders.

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Guest post to Ronn Torossian blog on Ronntorossian.com

Guest post to Ronn Torossian blog on Ronntorossian.com

Mama, don’t take my Kodachrome

by Juda Engelmayer, SVP, 5WPR

“When I think back on all the crap I learned in high school It’s a wonder I can think at all, and though my lack of education hasn’t hurt me none, I can read the writing on the wall.”

These words, iconic and now ironic, were made famous by the great duo Simon and Garfunkel at a time when the orange-boxed Kodakchrome was as common as the iPod is today.  The Eastman Kodak Company, however, failed to read the writing on the wall.  The iPod, for its part, made Sony’s reigning portable music box (the “Walkman”) obsolete, but unlike Sony, which maintained its edge with other devices, Kodak failed to adapt.

The company — whose name was until only a short time ago as synonymous of the camera industry as Band Aid still is to the adhesive bandage business— was so comfortable being on top, its corporate culture could not see beyond it own greatness to plan for leaner times.

As digital imagery crept onto the market and the megapixel count rose to such a point that the silver-coated cellulose acetate strips went the way of the muscle car’s carburetors, leaving it for enthusiasts and pedants, Kodak, which based its growth on the sale of cheap throwaway cameras and mass quantities of consumables such as its film, developing chemicals and photo paper, lost its market share.

Remarkably, although the technology may be different, the ingredients are similar and Kodak was poised for evolution.  Anyone who ever tore apart an old floppy disk knows that the memory mechanism was little more than a thin sheet of plastic.  Kodak presumably had access to the raw materials, but lacked the foresight to simply add an additional assembly line, if not change some out completely.

The question is why.

That answer is that Kodak became complacent, resting on its laurels and unwilling to change even as the world changed around it.  Its leadership failed to comprehend the extent of the digital revolution.  Other companies that were never before in the photography business saw an opportunity to not only create cameras that rivaled the best Kodak could develop, but to create a whole new industry.  There are the high capacity memory cards that can hold more images on a thumbnail-sized device than 1,000 rolls of Kodak’s top consumable films, and there are massive networks of photo-sharing and editing options available in Cyberspace.

Instead of realizing that people would now be sharing their children’s portraits on Smartphones rather than wallet-sized paper photos, Kodak was still pushing wallet-sized paper photos.  While the family portraits on office desks across the world were being viewed on multi-picture digital photo screens, Kodak was still hawking paper fitted to cheap wooden frames.

By the time it bought its way onto the Internet with its Kodak Gallery, it was a high-priced new kid on the block, and without the communal interactivity that allowed others to thrive.

The field of public relations is no different.  It was not so long ago that the Big “three” networks ruled the television airwaves and the only serious news in town came from daily publications that ruled the news landscape and weekly ones that put the news into perspective. Firms founded in the glory days of Walter Cronkite’s “that’s the way it is,” which trivialized the impact that blogs, podcasts and the Huffington Post would have, and perhaps looked down their collective noses at the lowered standards of journalistic ethics, sneering at how the public would never accept media that failed at being “authoritative” because of those lowered standards are likely no longer around to complain about the fast pace of innovation.

This is the vowel sign age: Adaptability; evolution, innovation, opportunity and user-friendly simplicity are key characteristics of companies that want to meet the demands of a new era.  Technology has moved fast since the dawn of the personal computer in the early 1980s with the advent of beasts like the Osbourne and the Kaypro, and it has changed the way just about everything is done today.  From manufacturing, to marketing, to the speed that information flows, complacency kills companies. The big three U.S. Automakers learned the hard way that resting on laurels was a recipe for failure when they lost ground to the new, less expensive and better quality foreign manufacturers.

As Kodak is looking down the gullet of obsolescence and worthlessness, companies and corporate leaders can use it as a valuable learning tool.

In the late Seventies my uncle had a cartoon hanging on his bathroom wall that I always found poignant, but I never really contextualized it until the news hit that the giant Eastman Kodak was falling. It was a depiction of a roadside with tire tracks running through a broken outhouse and a caption that read, “Technology in of itself was not the juggernaut of our destruction. Our machines did not just lead us down the road to perdition. They merely rolled over us as we squatted by the roadside.”

The writing is on the wall. Don’t let it happen to you!

Read More at Ronntorossian.com

This was a special guest blog post to the blog of Ronn Torossian, CEO of 5WPR

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Filed under Corporations, Juda Engelmayer