Feds Link Hack to North Korea as Sony Cancels 'The Interview' Release

Under the threat of terrorist attacks from hackers and with the nation’s largest multiplex chains pulling the film from its screens, Sony Pictures Entertainment took the unprecedented step of canceling the Dec. 25 release of the The Interview.

The cancellation, announced Wednesday, was a startling blow to the Hollywood studio that has been shaken by hacker leaks and intimidations over the last several weeks by an anonymous group calling itself Guardians of Peace.

A U.S. official said Wednesday that federal investigators have now connected the Sony hacking to North Korea and are expected to make an announcement in the near future. The official spoke on condition of anonymity because the official was not authorized to openly discuss an ongoing criminal case.

Related: 5 Ways to Save ‘The Interview’

Sony said it was canceling The Interview release “in light of the decision by the majority of our exhibitors not to show the film.” In a later statement, the studio added there was also no DVD or VOD in the works, either. “Sony Pictures has no further release plans for the film,” a studio spokesman said.  

The studio said it respected and shared in exhibitors’ concerns.

“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,” read the statement. “We stand by our filmmakers and their right to free expression and are extremely disappointed by this outcome.”

Earlier Wednesday, Regal Cinemas, AMC Entertainment and Cinemark Theatres — the three top theater chains in North America — announced that they were postponing any showings of The Interview, a comedy about a TV host (James Franco) and producer (Seth Rogen) tasked by the CIA to assassinate North Korea leader Kim Jung-un (played by Randall Park).

Regal said in a statement that it was delaying The Interview “due to wavering support of the film The Interview by Sony Pictures, as well as the ambiguous nature of any real or perceived security threats.” AMC noted “the overall confusion and uncertainty” surrounding the film.

Sony had offered theaters the option of bowing out, and when so many of them did (other chains included ArcLight Cinemas, Cineplex Entertainment and Carmike Cinemas), it left Sony little choice for the release of The Interview.

On Tuesday, the hacking group threatened violence at theaters showing The Interview. The Department of Homeland Security said Tuesday there was “no credible intelligence to indicate an active plot against movie theaters,” but noted it was still analyzing messages from the group. The warning did prompt law enforcement in New York and Los Angeles to address measures to ramp up security.

This attack went to the heart and core of Sony’s business — and succeeded," said Avivah Litan, a cybersecurity analyst at research firm Gartner. “We haven’t seen any attack like this in the annals of U.S. breach history.”

With a modest budget of about $40 million, The Interview was predicted to earn around $30 million in its opening weekend before Tuesday’s threats and the cancellation of its release. Should the film not be released theatrically, Sony would also lose tens of millions in marketing costs already incurred.

Sony was also under pressure from other studios whose Christmas films could have been concern over movie going safety. Christmas is one of the most important box office weekends of the year. Releases include Universal’s Unbroken, Paramount’s The Gambler, and Disney’s Into the Woods. Sony’s musical Annie, also expected to be a big earner, debuts Friday.

Doug Stone, president of film industry newsletter Box Office Analyst, had predicted that The Interview could have made $75 million to $100 million. With Sony taking about 55 percent of domestic revenues, that could mean a $41 million to $55 million revenue loss, according to Stone.

Even though Sony has no immediate plans, Bock believes a video-on-demand release might be the best option. “This is the right time to do that,” he said. “People want to see this film.”

Sony’s announcement was met with widespread distress across Hollywood and throughout many other realms watching the attack on Sony unfold. A former senior national security official in the George W. Bush administration said Sony made the wrong decision.

“When you are confronted with a bully the idea is not to cave but to punch him in the nose," Fran Townsend, Bush’s homeland security adviser, said Wednesday during a previously scheduled appearance in Washington, D.C. “This is a horrible, I think, horrible precedent.”

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Eric Tucker and Darlene Superville in Washington; Lindsey Bahr in Los Angeles; and Mae Anderson in New York contributed to this report.

Photo: TouchVision