Sony's movie studio could be in more trouble than we thought. The studio is expected to face tens of millions of dollars in costs due to the massive computer hack that halted its operations and exposed sensitive data.
The cost should be less than the $171 million Sony estimated for the breach of its PlayStation Network in 2011 since it doesn't look like it involves customer data, experts to Reuters.
Costs for the attack by unidentified hackers include the investigation into what happened, steps to prevent a future attack and computer repair or replacement. Lost productivity while operations were disrupted will also add to the cost.
The attack is believed to be the worst of its type on a company in the U.S., which hurts Sony's reputation for a perceived failure to safeguard information, said Jim Lewis, senior fellow at the Center for Strategic and International Studies.
"Usually, people get over it, but it does have a short-term effect," said Lewis, who estimated costs for Sony could reach $100 million.
Lewis added that it normally takes around six months after a breach to determine the full financial impact.
Sony said that it is assessing the impact and won't estimate costs yet.
Cybersecurity insurance typically reimburses only a portion of costs from hacking incidents, experts said.
People who have claimed responsibility for the attack uploaded yet-to-be-released Sony films online, like the holiday musical "Annie." Macquarie Research analysts believes Sony will take an impairment charge of 10 billion yen ($83 million).
Mark Rasch, a former federal cybercrimes prosecutor, believes that costs could reach up to $70 million.
Costs could mount if Hollywood stars, financiers and producers take projects to Sony's competitors.
"Will they be able to attract high-name stars if those stars believe their personal information will not be protected?" Rasch said. "How do you know what business opportunities are lost? It's hard to put a dollar figure on it."
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