America Loses to DPRK on the CyberWar

Sony Cancels Release of ‘The Interview’

Studio Scraps Dec. 25 Debut After Terrorist Threats Prompted Movie Chains to Skip Film

CNN: U.S. Government to Announce North Korea As Responsible for Sony Hack

The cyberterrorists won.

Sony Pictures canceled its planned release of “The Interview” marking the success of a brazen hacking attack against the studio and terrorist threats against theaters that played the film.

The Sony Corp. studio’s 11th-hour decision, unprecedented in the modern movie business, came after the nation’s largest theater chains all said they would not play the raunchy Seth Rogen farce set in North Korea.

Sony executives were considering alternative options, including releasing it only via video-on-demand or on television, said a person at the studio. But even those approaches could entail serious challenges. Given that the film already set off the worst corporate hack in history, chances were high that companies with major VOD businesses would regard the film as too radioactive to touch.

“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,” Sony said in a statement conceding defeat on Wednesday. “We stand by our filmmakers and their right to free expression and are extremely disappointed by this outcome.”

It sounds even more implausible than the plot of the lowbrow comedy itself, in which a pair of hapless television journalists is recruited by the Central Intelligence Agency to assassinate North Korean leader Kim Jong Un. As matters escalated this week, the film was thrust into the center of a nationwide debate over free speech, terrorism, international relations, journalistic ethics and cybersecurity.

The sight of the studio that released “Zero Dark Thirty” and “The Social Network” brought to its knees by hackers apparently affiliated with North Korea, one of the most isolated and impoverished nations on earth, set off alarm bells throughout Hollywood. On Wednesday, the production company New Regency canceled plans for a thriller set in North Korea, in which Steve Carell was to have starred, according to a person familiar with the matter. Production was to have begun in March. The cancellation was first reported by the Hollywood trade website Deadline.

Also in question is the status of several other scripts floating around Hollywood, including rights to the memoirs of North Korean defectors who spent years in the country’s notorious labor camps.

The reverberations will carry far beyond Hollywood, online security experts warned, saying that the episode could set a disturbing precedent. “This is now a case study that is signaling to attackers that you can get all that you want and even more,” said Pete Singer, a cybersecurity strategist and senior fellow at the New America Foundation.

Sony Corp. Chief Executive Kazuo Hirai retains confidence in Sony Entertainment CEO Michael Lynton and Sony Pictures head Amy Pascal, according to people familiar with the matter, and he doesn’t blame them for the attack.

The debacle’s roots stretch back at least to June of this year, when Sony executives deliberated over changes to the movie because of its political sensitivities. Though the studio never planned to release “The Interview” in Asia, Sony Corp. executives in Tokyo were concerned about the film because of Japan’s long and tense history with both North Korea and South Korea.

People claiming to be the hackers escalated their threats on Tuesday, warning of terrorist attacks on theaters that showed the film.

The Department of Homeland Security dismissed the terrorist threat as lacking credibility. But theater operators nonetheless asked Sony on Tuesday to delay the film’s opening, planned for Dec. 25, out of concern that the threats would depress box office sales across the industry during the critical holiday season. When Sony declined, the theaters decided Wednesday morning that they wouldn’t play the movie until the Federal Bureau of Investigation complete its probe of the matter, and maybe not even then.

Distribution executives at other studios worried that screening “The Interview” would depress ticket sales for other movies, and the concerns also threatened to keep business from surrounding stores and restaurants over the holiday season.

Sony executives had long been aware “The Interview” would be controversial and have attempted to make a number of changes to its content and release strategy as a result, according to emails leaked by the hackers.

In June, Sony Pictures President Doug Belgrad sent a message to Sony Entertainment’s Mr. Lynton, saying, “I understand this is a delicate issue and will do whatever I can to help address all of the issues and concerns.” He added that he was only aware of two other movies that depicted the killing of a living international leader: Charlie Chaplin’s “The Great Dictator,” which features a thinly veiled version of Adolf Hitler, and “Team America: World Police,” a 2004 musical comedy in which former North Korean leader Kim Jong Il is depicted as a puppet.

The next week, Mr. Belgrad got Mr. Lynton’s approval to spend $550,000 to digitally remove images of former North Korean leaders Kim Jong Il and Kim Il-sung from pins and murals in more than 500 shots.

By July 1, the studio’s Japanese parent became concerned. An executive at Sony Corp. who dealt with diversity and human rights wrote to Sony Corp. of America President Nicole Seligman, saying he was worried the movie could lead “to a great negative affect [sic] on the relationship between North Korea and Japan.”

To back up the studio’s case for the film, Mr. Lynton already had been in contact with a North Korean expert at think tank Rand Corp.

While Sony did go ahead with the film, executives decided to remove all references to the company from the film and not even host promotional materials on the website. The movie was instead branded only with the Sony label Columbia Pictures.

At the same time, Sony Pictures executives reached out to Comcast Corp. ’s Universal Pictures about handling distribution of the movie in all foreign countries save for Asia, where “The Interview” wasn’t ever planned to be released. Such a partnership would have cost Sony about $3.5 million, according to an email from a senior executive.

Sony was looking for a partner to help it back the movie in the case of potential political heat, said a person with knowledge of the talks. Universal passed, citing an already full release slate.

Later in the summer, the studio was in tense discussions with Mr. Rogen and his co-director Evan Goldberg over proposed changes to the scene in which Kim Jong Un is killed by a missile.

“As Amy can attest from Seth’s many emails to her, he’s pretty agitated,” Mr. Belgrad wrote in an email following an August report in the Hollywood Reporter that Sony was making changes to the movie. The comic actor was concerned that critics would focus on “whether or not the film was ‘censored’ rather than simply judging whether or not it’s funny.”

Executives all the way up to Mr. Hirai discussed minute details about the changes, such as how much fire would be in Mr. Kim’s hair, how many embers on his face, and the size of an explosion.

“There is no face melting” in the latest cut, Ms. Pascal assured Mr. Hirai in a September email. He urged her to push Messrs. Rogen and Goldberg to tone down the scene a bit further and remove it entirely from international versions.

It is unclear how many changes the directors ended up making to the final cut of the film that was to be released next week.

U.S. officials haven’t reached a final ruling on who was behind the breach. There are diplomatic concerns if North Korea was involved, U.S. officials and people involved in the investigation said. For instance, some officials worry publicly blaming North Korea for the attack could put Japan, a U.S. ally, in a bind. Tokyo, unlike America, has to deal with North Korea as a neighbor just across the Sea of Japan.

The FBI didn’t immediately respond to a request for comment.

An accusation also creates distinct problems for Washington, these people said. If the U.S. blames North Korea for the attack, it then feels pressured to respond. And the proportional response in this case isn’t clear, as North Korea already is sanctioned and cut off from much of the world.

Nations have yet to agree on what types of cyberattacks are acceptable without escalating tensions. Some experts believe that in cases like the Sony attack, the U.S. needs at least to make a public condemnation.

“We can set the norms by coming out and saying this is just too much,” said Jay Healey, an expert on cybersecurity and diplomacy at the Atlantic Council near Washington.

After hackers entered Sony’s systems more than a month ago, they installed malicious code that would eventually wipe hard drives on many corporate computers. This wiped away many of the digital clues and has made the investigation by the FBI and FireEye Inc., a cybersecurity company, very difficult. As of Wednesday, investigators still can’t say they have removed and blocked the hackers from Sony’s systems, people familiar with the investigation said.

The situation also remains tenuous for Sony Pictures’ parent company in Tokyo. After investigators at FireEye determined North Korea was likely linked to the attack, it proposed a public report that would offer an update on the breach and implicate Pyongyang hackers. Sony’s Japan headquarters nixed the idea, people familiar with the probe said.

Though hardly any North Koreans have access to the Internet, mobile phones or other modern technology, the nation is believed to maintain a robust hacker corps, many of them stationed in China or elsewhere outside the isolated nation.

Kim Kwan-jin, then-defense minister in Seoul, said last year that North Korea runs a dedicated cyberwarfare military unit composed of 3,000 people.

Chang Yong-Seok, a senior researcher at the Institute for Peace and Unification Studies at Seoul National University, said a film like “The Interview” would likely have provided an incentive for North Korean officials to prove their loyalty to the dictator as the film insults the leader’s dignity.

“An extreme response is a way to secure one’s position and professional success,” Mr. Chang said.

Posted in Citizens Duty, Cyber War, DOJ, DC and inside the Beltway, Failed foreign policy, History, Human Rights Violations United Nations, NSA Spying, Terror.

Denise Simon