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What Should HBO Do About the Hacker Ultimatum?

”Ethical hacker“ outlines to TheWrap exactly what’s at stake for TV giant

HBO is in a bind.

Hackers going by the name “Mr. Smith” have infiltrated the cable network’s security system and jacked its content, threatening to release new shows, including another “Game of Thrones” episode, and corporate information — if their ransom isn’t met. Mr. Smith is demanding a hefty sum : “Our 6-month salary in bitcoin,” or about $6 million to $7.5 million.

And now HBO has three days to either pay the ultimatum or call Mr. Smith’s bluff.

So, what should the television juggernaut do?

The first step is to take a “risk assessment” of the situation, according to Asher DeMetz, a Senior Consultant with IT Consulting firm Sungard AS.

“If they don’t pay it, how much will that cost them? Compared to $6- or $7 million,” said DeMetz in an interview with TheWrap. “It would have been a lot cheaper if they’d invested a few million dollars into their security program.”

DeMetz has helped several Hollywood studios and streaming services combat cyberattacks in the past, working as an “ethical hacker” to point out vulnerabilities in his client’s security. But the HBO incident is different from the common ransomware attacks he sees regularly, where hackers have an incentive to unlock hijacked computers so that future targets are willing to pay up.

“In this case, they actually have the data, it’s a different scenario,” said DeMetz. “Maybe they’ll release [the content] and ask for more money later on. It’s a tricky situation.”

With 1.5 terabytes of stolen content, Mr. Smith has a healthy amount of data. But it comes down to dollars and cents for HBO; if network decision makers think the network is losing less money allowing Mr. Smith to release its loot, they likely won’t fork over the bounty.

“If I’m going to lose a lot more, say $100 million, then I’m going to say ‘OK, $6 million is worth it,’ even with the risk they’re going to ask for more money and possibly release more [content] later,” said DeMetz. “It’s a business decision.”

With “Game of Thrones” hitting a season high in ratings this week, despite the episode leaking in advance, HBO would appear less inclined to bargain with the digital thieves. Worst case scenario: This inadvertently turns HBO toward the Netflix model for a brief period, with its episodes releasing in bulk.