The comedy, starring Seth Rogen and James Franco, is about a fictional plot to kill North Korean leader Kim Jong-un. Hackers, identifying themselves as Guardians of Peace, have warned the public to stay away from cinemas screening the film, reported Deadline.
"In light of the decision by the majority of our exhibitors not to show the film 'The Interview', we have decided not to move forward with the planned December 25 theatrical release. We respect and understand our partners' decision and, of course, completely share their paramount interest in the safety of employees and theatre-goers," Sony said in a statement.
"We are deeply saddened at this brazen effort to suppress the distribution of a movie, and in the process do damage to our company, our employees, and the American public. We stand by our filmmakers and their right to free expression and are extremely disappointed by this outcome."
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Actor Steve Carell took to Twitter to express his distress over the situation, and wrote, "Sad day for creative expression. #feareatsthesoul".
Studio bosses at New Regency have apparently pulled the plug on Carell's 'Pyongyang' for its reported North Korea angle.
"Hollywood has done Neville Chamberlain proud today. Wow. It wasn't the hackers who won, it was the terrorists and almost certainly the North Korean dictatorship, this was an act of war," Rob Lowe said.
High-profile producer Judd Apatow, a friend and collaborator of Rogen, who starred in the film alongside Franco, said, "I think it is disgraceful that these theatres are not showing 'The Interview'. Will they pull any movie that gets an anonymous threat now?"
Zach Braff said, "Cancelling 'The Interview' seems like a pretty horrible precedent to set."
Screenwriter Aaron Sorkin, whose own emails were released in the hack, also spoke about Sony's decision.
"Today the US succumbed to an unprecedented attack on our most cherished, bedrock principle of free speech by a group of North Korean terrorists who threatened to kill moviegoers in order to stop the release of a movie," he said in a statement.