Sony-pocalypse Round 2 – Sony Pictures Fights Back (Updated)

sony-1214Since I put out the blog Sony-pocalypse Round 2 — Sony Pictures Fights Back… the other day, new major developments have taken place since it published. Thus a necessary edit to the blog.

We’ll start from the top:

If you haven’t already heard, Sony Pictures was recently breached, and it was brutal. If you need to be brought up to speed, take a look at my LinkedIn blog Sony-pocalypse — Now What? to see information on the breach of Sony Pictures. The blog covers the cyber attack, celebrity identity theft, password protection (or lack thereof), and the controversy being caused by the new movie comedy “The Interview,” which involves a plot to assassinate the North Korean leader, Kim Jong-un. It is believed to be a group out of North Korea that is responsible for the attack, however there is no hard evidence to this claim and North Korea has denied involvement — even though they have labeled it a “righteous attack.” The group stole several upcoming movies, including one that is considered to be a potential blockbuster (Annie) and posted them online for free peer-to-peer file share access. The Interview was not pirated as the group has criticized it and demanded that Sony Pictures cancel the movie’s Christmas day release.

The group claiming responsibility for the breach, the “Guardians of Peace” (or #GOP) hacked into computers at Sony Pictures. Following is a video showing the “stolen” films as well as the message displayed on hacked Sony computers:

More fallout from the breach: Private correspondence within Hollywood’s inner circles between powerful producers and executives concerning petty arguments and internal politics has been exposed. Certain data released included spreadsheets outlining financial deals Sony had with third parties, which could hurt its standing with its partners. Also exposed was how much these third parties have paid Sony for rights to certain TV shows and films. In short, it’s become an unmitigated disaster for Sony Pictures… however they’ve just answered the call (in a self-defense distributed denial of service attack). Or so they thought.

And here’s where we divert…

The Interview

How long until this theater explodes?

That’s right, hold onto your seats. Sony Pictures, one of the largest movie studios in the world has just cancelled its Christmas Day blockbuster release “The Interview” and one of the major reasons – the Guardians of Peace had threatened to blow up movie theaters if the movie was released on Christmas Day. Internet terror leading to terror in the streets. Major theater chains one by one began to cancel the showings fearing the reality of mass explosions in theaters in major cities. The New York debut was cancelled almost immediately. Probably not a good thing when a major movie premier is accompanied by SWAT teams outside the theater complex door.

As a result, Sony Pictures, at this point literally dragged to its knees, has decided to cancel the releases in the theaters, on streaming, DVD, Blu-ray, cable, etc. Sony has stated that it has no further release plans for the movie, though many are questioning this action. However it looks like Stephen King has full faith in a tweet he put out yesterday:

It appears as if the top executives at Sony Pictures are no longer running the show – a faceless team of cyber criminals have replaced the upper echelon. As for the statement included in the “Christmas present” that the GOP was planning on sending to Sony:

“The farther time goes by, the worse state SPE will be put into and we will have Sony go bankrupt in the end. Message to SPE Staffers: We have a plan to release emails and privacy of the Sony Pictures employees. If you don’t want your privacy to be released, tell us your name and business title to take off your data.”

Bankrupt. I’m not sure the GOP needs to help Sony with this anymore as it seems they’re digging their own deep hole at this point. Some numbers:

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With no box office grosses or ancillary returns Sony is looking at a write-down comprised of the following:*

  • A production budget of about $45 million
  • A domestic marketing budget of $35 million
  • An overseas marketing budget estimated between $10 million to $12 million

It has been determined that the losses on the film itself will pale in comparison to the toll the hacking and data dumps will take. Lost revenues as well as the liability the company will face from the release of employees records by the hackers could well push the toll into the hundreds of millions of dollars. Yes, here come major lawsuits. If Sony Pictures had cybersecurity insurance (yes it exists) they could well be insulated with insurance company lawyers joining their lawyers in taking up these cases as well as the backing of the insurance company to help protect their assets. Wait, how could this be possible for a major corporate enterprise whose lawyers likely do nothing all day but spend time in court over frivolous lawsuits concerning petty squabbles between execs, spoiled actors and actresses and other movie industry troublemakers?

Let’s just say The Guardians of Peace are standing in the shooting gallery right now with an endless supply of ammunition which they can empty into Sony Pictures at any time and at any given moment. The White House has issued a declaration that a “proportional response” in a “cybercounterattack” could be coming against those thought to be behind this (at least they think they know – hint: North Korea). While we wait for meeting after meeting from the While House to Congress, etc. to determine the best course of action, we may just be be watching Sony Pictures disintegrate right before our eyes.

As White House Press Secretary Josh Earnest stated: “I don’t anticipate that we’ll be in a position where we’re gonna be able to be completely forthcoming about every single element of the response that has been decided upon.” Just what we needed at a critical juncture concerning national security, political-speak.

The funny thing is, I heard reviews of The Interview weren’t that good. Yes, typical great movie trailer, garbage movie. Here’s part of a Wall Street Journal review from 12/18:

So how did such a turkey ever escape the studio lot? A significant part of the answer lies in the dumbing-down of the audience that began decades ago, when studios discovered that kids would turn out to see almost any piece of junk on any weekend provided the marketing departments did their jobs. Movies weren’t the only coarseners of pop culture, but they led the way, with the eager assent of the paying public. The dumbing-downers were so successful for so many years—and became so beholden to a small coterie of popular stars—that they dumbed themselves down to a level of trivialization where reality and reckless fantasy were no longer readily distinguishable. As Hollywood spectaculars go, “The Interview” was long in the making.

Sony-pocalypse Round 3? It could either be “Waiting For The Next Attack” -or- thanks for saving us from spending $12 on a misfit of a movie. Or both…

*Figures provided in this article: How Much Will Scrapping ‘The Interview’ Cost Sony?