Is Record-Breaking 'Game of Thrones' Piracy a Problem for HBO?

"Game of Thrones" recently broke a Bittorrent record, making a recent episode the most-pirated single episode of a TV show of all time. Is this bad news for HBO, or is the network actually pleased with this distinction?

Apr 19, 2014 at 7:25AM

Recently, the torrent news website TorrentFreak revealed that the second episode of season four of HBO's "Game of Thrones" was the most downloaded TV episode ever. According to the site, as many as 1.5 million people downloaded the episode within the first day of its release and 193,000 of those had shared a copy of the episode within a few hours of its release. Given that Time Warner (NYSE:TWX), owner of HBO, isn't making any money off of these downloads, will the show's popularity among pirates be its downfall?

Pride in the distinction
Last year, Time Warner CEO Jeff Bewkes made the comment that having "Game of Thrones" as the most pirated show in the world was "better than an Emmy." He isn't the only one associated with the show that seemed to take pride in its popularity on torrent sites, either; various members of the cast and crew, including director David Petrarca, have expressed opinions that rampant piracy actually had a positive effect on the show.

While speaking at Perth's Writers Festival last February, Petrarca commented that "cultural buzz" was a key part of keeping shows like "Game of Thrones" on the air. He argued that pirates help to feed this cultural buzz, and that the people who download the show and talk about it with friends are actually increasing interest in the show.

While this is obviously true given how many people were discussing the "purple wedding" after the show's record-breaking episode, how does this cultural buzz translate to financial success for the show?

Do pirates spend money too?
If record numbers of people downloading "Game of Thrones" had a significant impact on HBO, it would likely come in the form of reduced subscriptions or slow DVD and Bluray sales. Neither of these seem to be happening, however.

When speaking with Entertainment Weekly on the subject last March, HBO programming president Michael Lombardo stated that piracy was "something that comes along with having a wildly successful show on a subscription network." He explained that while the company does try to stop piracy when it finds it, it hasn't "sent out the 'Game of Thrones' police" to try and stop casual downloading. A larger concern seemed to be those who sell bootleg copies of the show, actively denying HBO sales and potentially giving viewers a different experience than they would receive from an official release.

Lombardo explained that piracy "certainly didn't negatively impact the DVD sales," explaining that the show was in high demand despite rampant downloading. He even confirmed that it was the top money earner for the network, saying "If you look at aggregate of international and DVD sales — which are the two revenue streams we look at since we're not selling it domestically on another platform — yes, absolutely, in terms of shows we have on now."

Piracy as a metric
HBO isn't the only one keeping track of downloads. Netflix (NASDAQ:NFLX) has admitted to tracking the most popular downloads to determine which shows and films are in the highest demand as a way to plan future acquisitions. The company attempted to get the streaming rights to "Game of Thrones" at one point, though HBO declined the offer since the streaming service would provide direct competition for subscribers.

The reasoning behind this is fairly sound, since looking at what people are downloading is a good way to tell which content is popular. Netflix uses this to provide a legal streaming option for would-be pirates, allowing them to watch shows instantly instead of waiting for the episodes to download. HBO offers a similar option in HBO Go, though new episodes of "Game of Thrones" have been known to overload demand on the server and cause the service to crash.

Final thoughts
Even though piracy can be a major problem in the entertainment realm, HBO seems to view it more as a metric of the success of "Game of Thrones" and other shows. Both the network and those involved with the show have expressed more than once that high piracy stats are something to be proud of because it means that people are enjoying the show. Moreover, it doesn't seem to be hurting subscriptions or sales so there's no reason for HBO to make a knee-jerk reaction to try and stop it.

If piracy did become a problem for the show, the network's best bet would be to shore up its HBO Go service and possibly spin it off as a separate product (which has been making the rumors of late anyway). This would give potential viewers easy (and legal) access to the show in streaming form, eliminating the wait for downloads and enticing new subscribers with other offerings as well.

If the service does spin off into its own product, it'll be interesting to see whether HBO actually affects the piracy numbers instead of the other way around.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

John Casteele has no position in any stocks mentioned. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers