'Game Of Thrones,' 'Dexter' Piracy Cost Cablers Multimillions
- by Wayne Friedman , April 4, 2013
HBO's "Game of Thrones" is considered to be the most pirated TV show.
Pirated TV shows continue to mean lost revenues to TV content owners
-- and at the top of the list, the HBO drama is estimated to have seen some 4.3 million illegal downloads, costing some $170.7 million in revenue last year, according to TorrentFreak.
The
next-most-stolen TV show is another pay TV show: Showtime's "Dexter" at 3.9 million downloads. That lost the cabler $138.1 million in 2012.
The next two slots go to two broadcast network
shows from CBS: "The Big Bang Theory" at 3.2 million downloads, losing some $229.6 million, and "How I Met Your Mother" at 3.0 million downloads and $212.4 million in revenue lost.
Two
ad-supported cable shows come next from AMC Network: "Breaking Bad" at 2.58 million downloads and $100.3 million in revenue lost, and "The Walking Dead" with 2.58 million downloads and $99.1 million
in lost revenue.
Another Showtime drama is next -- "Homeland" at 2.55 million downloads and $86.1 million.
Fox's "House," which ended last season, is at 2.4 million and $153.9
million, and the network's still-on-the-air "Fringe" is at 2.34 million downloads and $150 million. NBC's first-year drama "Revolution" had 2.28 million downloads and $140.1 million.
The
data includes downloads up to mid-December 2012. Revenue estimates include pay-per-view, single episodes and HD format.
Some analysis says much of the entertainment piracy occurs in
international markets, where TV shows and other content do not have legal distribution.
Estimates from digital video company Ooyala say that if this download rate continued for each show
throughout a typical season, it would mean almost $1.5 billion in lost potential revenue just among the top 10 shows alone.
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First, this is a great opportunity to point out that these shows COULD be earning money from downloads if they had the will to make it happen. Nobody explains this problem better than The Oatmeal: http://theoatmeal.com/comics/game_of_thrones
However, most companies in the business of distributing television content would rather dig in their heels and resist new business models even though the handwriting is on the wall. Of course, they’re strong-armed by the cable monopolies as well.
Second, I’m curious how the numbers are crunched. Are theoretical dollars lost based upon the projected price of digital downloads? If so, are those single downloads or season passes? Or are those numbers based on the idea that all those people downloading would otherwise subscribe to their local cable providers for $100+ a month? If so, that’s pie-in-the-sky wishful thinking. Cord-cutting is a growing trend and most youngsters have never even owned a television set and may not for a very long time.
Completely agree with Carri, measurement details would be helpful here. Also, is this factoring in advertising dollars/opportunities lost via pirated viewership?
Yes Carri, they COULD be earning money from downloads. But that does not mean that they SHOULD be. Let's say you run a local bakery and sell bread for $2 a loaf. You COULD sell it for a dollar or even 50 cents. You could gain local market share. You could also go broke. The question is not whether you COULD ... it's whether it is sustainable to do so. In the world of content creation so much of it relies on upfront money. In the main this comes from the studios and broadcasters and virtually none from online or downloading. Without this upfront money the writers, actors, directors, producers, cameramen (or is that camerapersons), soundies, gaffers, props, costumes etc don't get paid until the trickle of download nickels and dimes arrives maybe a year or so later. By myopically focussing just on distribution you have missed the big picture of content creation - people who deserve to be paid upfront. Having said that, of course, the broadcasters and studios need to have rapid downloadable content streams - but why should it be at the cost of content creation? Oh, unless you want to watch endless cats on a keyboard.
John, I don’t think the baker is an apt metaphor because the materials and delivery costs for physical goods are always a big factor in determining profitability. However, TV programs are no longer physical goods since you don’t have to buy a videotape or DVD to watch them. Production costs are fixed regardless of the size of their audiences and distribution costs are negotiable. Any additional money that makers of TV programs can earn beyond old-school distribution deals is basically gravy (with minimal additional infrastructure and marketing costs added in).
I get that they need up-front money to produce shows, but one-off subscriptions to networks (as HBOgo is considering) could offset diminished revenue from traditional business models. The TV business is a risky one since most shows fail, but it’s still lucrative enough that they’ll figure out new models to make it happen.
Big picture, people want what they want and will do what it takes to get it, so it’s futile for media producers to put blinders on and pretend it's not going to happen. As a professional musician, I don’t personally support streaming services because they will decimate the ability for most independent musicians to earn any viable compensation from their recordings. It takes $5k to $25k to produce a decent indie album, yet streaming services net most musicians just pennies a month—hardly a sustainable business model. That means we’ll have a whole lot less music, IMHO. But nobody can stop the streaming trend because that’s what the public wants and the technology exists for them to get it—just like downloading bittorrents of TV shows.
At least huge media properties have the resources to get ahead of the trend—if they are wise.
Carri, I agree that materials and delivery are very different to the virtually zero 'digital duplicate' costs. But the analogy still holds because the upfront labour costs are the 'materials' of a TV programme and they have to be recouped. Your music analogy is very apt. The difference is that the $5k- $25k for a decent indie album would buy you maybe one minute of broadcast quality TV (at your top end). TV and film (of quality that audiences want) is very expensive. That being said the broadcasters HAVE to forego the old 'windows' distribution system and move to either cinematic or broadcast release followed (within 7 days?) of download release. Here in Australia our Subscription TV company is Fast-tracking Game of Thrones within an hour of first play, so at least they "get it". The amount of change I have seen in distribution and rights/plays agreements in the past 12-18 months makes me think that the process is actually well under way (at least down here). I imagine that within a few years everything will be on that basis here or no-one will bother showing the content.
Seems that the GoT content owners don't necessarily agree with you. Taking a page from the Matt Mason book, The Pirate's Dilemma, seems like embracing piracy to some degree might just create buzz. It IS a problem, but reflecting on other forms of past media piracy is probably worthwhile:
http://news.yahoo.com/hbo-admits-piracy-compliment-doesn-t-hurt-sales-035946132.html
I would like to think of this as $170.7 million saved in advertising. These pirated downloads equal word of mouth endorsements. If they were really concerned about piracy, they would make the episodes easier to obtain and pay for.