Every once in a while, a piece of financial news will definitely qualify for news of the weird. Last week, an old -- and extremely weird -- piece of news cropped up. Sony's (NYSE: SNE ) cash settlement in a class action lawsuit was made official. That lawsuit alleged that it had created a fake film critic to attach to "quotes" in ads pushing several of its films back in 2001.
Yep, that's right. Some critical raves for a few of Sony's films in 2001 were pure marketing, since the "David Manning" in question was not a film critic working at the Ridgefield Press in Connecticut, as the ads claimed. In fact, he wasn't a film critic, or even a real person, at all. (However, that newspaper does exist, which makes the whole story even weirder, if that's possible.) "Manning's" effusive praise talked up such screen gems as A Knight's Tale, The Animal, and Hollow Man.
Maybe desperate times called for desperate measures (although it's more recent history that one might imagine film studios trying some desperately weird tactics to lure moviegoers to their features). It's hard to call the idea anything but baffling, though.
Sony agreed to settle the class action lawsuit on behalf of duped theatergoers for $1.5 million (although I have to say, the idea of moviegoers basing their trips on those pull-out quotes on the ads is kind of beyond me, but anyway). Yep, it translates into a $5-per-person refund for the price of the tickets. The fee is chump change compared with the $10 million Sony agreed to pay related to a recent settlement of a lawsuit alleging that Sony engaged in that nasty little radio habit, payola.
And of course, speaking of a $1.5 million drop in the bucket, Sony is a global company that reported $67 billion in revenues last year. On the other hand, while the settlement might very well be a mere slap on the wrist financially, it's the psychological repercussions that are bothersome. Sony did not admit liability in the suit, but the sheer act of settling implies culpability to some people. In fact, Sony apparently temporarily suspended two employees connected to the deception. Suspended? It boggles the mind, really, that the alleged masterminds of such an ill-conceived idea would merely get suspended.
There's a bigger picture still. These days, many companies are inventing more ways to advertise to customers in an increasingly difficult advertising environment (one that addresses the earth-shattering -- ahem -- idea that people don't particularly want to be advertised to in the first place and will ignore ads when they can).
In that vein, companies have to think of innovative ways to get their products noticed, as has been seen in the recent push for product placement. However, Sony's fabricated film critic is an example of how companies may go too far -- and in a lack of foresight, wisdom, and common sense, they could very well make consumers even more jaded and distrustful of their messages.
Read some recent Foolish articles on Sony -- all written by real, live people, I guarantee it:
- Sony was playing that same old song with payola.
- Can Sony kill the iPod?
- Here's the latest on Sony in the console wars.
Alyce Lomax does not own shares of any of the companies mentioned.