

'Game of Thrones' Sets Piracy World Record, But Does HBO Care? - passepartout
http://www.forbes.com/sites/insertcoin/2014/04/15/game-of-thrones-sets-piracy-world-record-but-does-hbo-care/

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chc
The bulk of this article is based on a misconception. The author doesn't seem
to realize there is a difference between between Time Warner and Time Warner
Cable (which is especially ironic here since Forbes automatically links to
their separate NYSE listings). HBO is owned by Time Warner Inc., which severed
its ties with Time Warner Cable Inc. years before Game of Thrones ever aired.

HBO's reason for staying with cable doesn't seem to have all that much to do
with its corporate overlords. It seems to be more closely related to the fact
that HBO has evolved symbiotically with cable over many decades, and striking
out on its own would require HBO to make use of a lot of muscles it just never
needed before (for example, advertising). So until their business model starts
actually causing problems, they're OK with being pirated left and right
because sticking with the tried and true still makes them money hand over
fist.

~~~
jonnathanson
_" It seems to be more closely related to the fact that HBO has evolved
symbiotically with cable over many decades"_

Yes, and that might even be an understatement. To the extent HBO moves into
direct-subscription or advertising-driven models, it'll need to find a way to
do those in addition to its existing, cable-licensing business -- not as an
alternative.

The problem is that HBO makes a lot more money licensing to cable providers
than it realistically could by selling episodes a la carte, by selling
advertising, or by selling HBO subscriptions individually. Any president or
C-level exec at HBO (regardless of its corporate parent) is going to have a
hell of a time initiating that process, politically, organizationally, or
economically. It would basically amount to telling shareholders, stakeholders,
and peers that one is going to jeopardize X to pursue a very uncertain X/4.

HBO will go a la carte, or ad-driven, if and when it can figure out how to
make the economics of doing so more attractive than the economics of B2B
licensing fees. That's easier said than done. It will probably require one of
two things: 1) a platform-agnostic licensing strategy, i.e., to diversify away
from cable; or 2) a complete rethinking of content forms, types, and
salability.

It bears mentioning that even ad-driven broadcast networks make more money off
of cable licensing than they do from advertising. (The revenue split is about
48% advertising and 52% cable/distribution fees, trending toward 40/60.)

As for the article's fundamental mistake--conflating Time Warner with Time
Warner Cable--that's a pretty big one. TWC spun out from TW back in 2009.

~~~
sentenza
The question is: Is the payoff worth it, considering that entire countries are
currently "conditioned" to obtain Game of Thrones by illegal means?

Many people speak of Australia, but take Germany as another extreme example.
HBO doesn't offer its services here so there are only two options if you want
to watch Game of Thrones:

1: Get a subscription of Sky, which is mostly sports and has a minimum
subscription time of 2 years. So if you're not into sports, that's about 800$
for two seasons of Game of Thrones.

2: Wait one year and then buy the DVD, because it will be available exactly
one year later.

The thing about culture, though, is that you can't participate in the
phenomenon that is happening _now_ if you have to wait a year.

So everybody here is pirating it like crazy. Curiously enough, Germany never
appears in the piracy statistics because due to some weird legal specialties
here, your chance of getting caught when using Bittorrent are 100%.

All the non-tech people I talk to watch it using sketchy streaming sites, thus
generating advertising revenue for criminals and infecting their Windows boxen
with malware.

I don't know what the long-run consequences are, but they can't be good.

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balls187
HBO gets paid by cable companies, not by end user subscribers.

Subscription fee's go to the cable providers, who are the ones that are
potentially losing out by piracy, though many cable providers are also
internet providers, so they do get _some_ money.

HBO would be worried if cable companies decided it wasn't worth it to carry
HBO, but they know currently HBO is an anchor on many lucrative tv packages,
which make cable companies lots of money.

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asharpe
There is no model where Piracy makes sense. There is a cost of piracy (both in
setting up and in risk of using). That HBO hasn't found a way to easily
capture that value speaks to them not having found the right channels to
market.

~~~
bratsche
> There is no model where Piracy makes sense.

That's not exactly true. Japanese anime companies have found a way to embrace
piracy in an interesting way that benefits their businesses.

There are all these piracy groups called 'fansubs', which are groups of fans
that take the Japanese comic or cartoon and make their own translations and
subtitles. Most of the time these groups are just excited about the show/comic
and translate it because it's not available in their language.

The companies used to treat them like any other piracy group, but some of them
started changing so that they treat them more or less like market research
groups. They can find out, with little or no investment, where a certain comic
or cartoon is successful. Then they can invest in doing their own translations
if it passes a certain threshold.

Once the creators begin releasing their own official versions of the
show/comic, the fansubs usually shut down. Their goal wasn't really piracy,
their goal was just to get the show released in their region.

~~~
asharpe
That's a very cool engagement model. I think that is more aligned with some
engagement with Open source: release the building blocks, let the community of
users start manipulating, then package up the best bits as a release. Not
piracy outright as you say and very cool way to engage.

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brownbat
I'm a little surprised a gray market hasn't emerged where cable companies will
rent you a login for HBO Go without stringing cable to your house.

~~~
jpollock
Comcast will sell you an HBO subscription unbundled from their TV service.

