Take a TV show whose target audience is largely young, geeky males, make sure that it becomes the kind of phenomenon that needs to be seen each week in order to stay in the conversation, and then block access to that show by not making it available to anyone except subscribers who pay a lot of money for access to your network and you have created the perfect conditions for piracy. Yes, to no one's surprise, Game of Thrones is the most pirated TV show of the year, with the episode from a couple of weeks ago surprassing 2.5 million downloads in a day. That is, to put it briefly, a lot of money that HBO is leaving on the table. But how much? How many of these people would buy Game of Thrones legally, were an a la carte option available?
Forbes' Erik Kain goes after HBO pretty hard for what he sees as short-sighted ignorance, but the issue is much more complicated than that (and, frankly, he seems to misrepresent HBO's position on a number of things). HBO is able to post the kind of profits it does because of its large and lucrative subscriber base. Those subscribers are paying a premium for HBO's programming which may, often, mean that they are subscribing just for Game of Thrones or just for Girls or just for True Blood. My dad, for example, wouldn't have HBO if they didn't program 10-12 boxing matches per year. If he could buy them all on pay-per-view, he'd probably cancel his subscription entirely, and I'm sure he's not alone. Additionally, HBO keeps their margins lower than they probably ought to be by outsourcing a lot of customer service and billing to cable providers. If HBO GO became a stand-alone service, all of that would go away (and some cable providers could stop offering HBO entirely, which would be a much bigger hit to the network's bottom-line). Everyone brings up Hulu as some kind of amazing counter-example but the fact is that Hulu (and even Netflix) are in much worse financial shape than HBO.
Don't think that HBO hasn't considered how much money they are losing from piracy. Long-term, they will be faced with the same cordcutting, cable marginalizing problems that the entire industry is facing. But in the present state, HBO is playing this as smart as they can, protecting their products' exclusivity and counting on their status and brand to attract the people who will pay a premium for high quality content. They've decided that they'd rather give up your $20-30 for a season of Game of Thrones to protect the guaranteed $15/month for at least 6 months, if not a year, that they get from regular subscribers. It's working for them too, so you'll forgive me if I'm not interested in weeping for a media giant or taking them to the wood shed for their choices. They know the trade-off they're making and they're accepting the risk that comes with it. Eventually, it will come back to bite them of course (especially as long as HBO president Eric Kessler keeps clinging to the tired "it's the recession's fault" line of reasoning which is holding back every TV network), but that's a problem HBO will be happy to kick down the field for as long as possible. If there's a hole in the market, its for an entirely new company to base its entire programming strategy around content that is available a la carte online.
Oh, and please don't act like this situation lets you off the hook for torrenting the show or somehow changes the moral calculus for piracy. HBO is making Game of Thrones and they get to set the terms under which it is available. If they want to film 50 episodes of season three and then set them all on fire in Central Park or only make the show available to people over 7 feel tall that is their perogative. I'm not saying that by pirating an hour of television you are a Joffrey-level monster or something, but what you are doing is unethical. Own it, admit to it, and buy the DVDs when they come out or something. And if something were to go horribly wrong and the show gets cancelled or faces cuts because it can't make a profit (which is obviously not a danger here but nearly happened to other highly downloaded shows), you kind of lose the right to complain about it.
[HBO's 'Game Of Thrones' On Track To Be Crowned Most Pirated Show Of 2012]
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