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I saw an interesting article reporting that Game of Thrones Breaks Piracy Record. Since piracy is a major concern for any company in the digital media arena, I wanted to take a look. The article didn’t contain all that many surprises, Game of Thrones is popular and that popularity is leading to piracy. That’s pretty standard, whether anyone likes it or not. What I found intriguing were a couple of quotes from HBO’s President of Programming Michael Lombardo. Here’s the first:

“[Piracy is] something that comes along with
having a wildly successful show on a subscription
network.”.

That sounds true, I imagine that the more popular something is, the more pirated it will be. That makes some logical sense. But, on the other hand, there’s a certain fatalism in that quote. He seems to be saying, this is the way of the world and there’s nothing we can do about it. To a degree he’s absolutely right, there will always be those who refuse to pay for anything or who will pirate not because they need to, but simply because they can.

However, to a certain extent, rampant piracy of Game of Thrones is a consequence of HBO’s (old fashioned, scarcity based) business model that doesn’t work too well in the world of cheap digital copying (and by cheap I don’t mean that no one will pay, but simply that the incremental costs to make a new digital copy of a file are very, very low. Our host for ComicBin will sell us bandwidth at $0.15/GB so for a 1 hour tv show, that’s about $0.15 in bandwidth costs. I expect HBO’s costs would be much lower.)

Today, if I want to watch Game of Thrones Season 3, I only have 1 legal option, pay for an entire HBO subscription. To watch 1 show. And of course, to get HBO, often the cable provider will require a “premium” cable package as well. So that one show gets pretty expensive. Perhaps I’ll find other shows I like on HBO, but perhaps not. And going into the decision, I only know that I will want to watch Game of Thrones.

I could wait for the season to release on iTunes or Vudu or another provider and pay $38 to own it, provided that I don’t mind not being able to participate in any of the conversations going on around me about how awesome it is. Or maybe not. The Oatmeal tried to do that and here are the results.

The other option is to do what apparently 1 million other people have done, get it for free from a torrent site. Given the options, I’m not surprised that many people chose to go the piracy route. As I said, it really is a problem of HBO’s own making. And worse, HBO is training people to pirate by making piracy the easier decision. Every time someone goes to look for a reasonable, legitimate option to acquire content only to find that it is unavailable or priced out of reach, they get more conditioned to use piracy to fill the need.

How many of those 1 million pirates would have been happy to watch Game of Thrones Season 3 on Netflix as part of their subscription or might be induced to spend $5 a month on Hulu or HBO GO? Probably a pretty large group. But when Comcast charges up to $24/month for HBO, that’s a much harder sell.

He goes on to say that the piracy didn’t affect DVD sales

This is something the music industry should have figured out a while ago but at least HBO seems to be paying attention. Many people who pirate aren’t unwilling to pay for content, they just aren’t willing to pay for it the way the producers want them to. They want content more conveniently and they want it right now. If that means pirating and then buying legitimate copies in the future, they will. Consumers really do understand the social contract that exists between themselves and the producers. I need to pay for your product that I like so that you will keep making more of it.

However, the consumer wants the product in the format of their choosing and at a time of their choosing. They want to watch the entire season in one long weekend, but not be behind the rest of the world. They want to start at 2 am, take a nap and finish up the next day at noon without having to own a DVR and jump through hoops.. Force them into a restrictive, inconvenient offering and they will find a way around it. Charge too much relative to the perceived value and the consumer will find ways to get discounts or will substitute for another product. If anything, consumers might understand the social contract better than the producers and the producers should start looking at their business models to make sure they aren’t locking customers out of buying their products.

The comic book industry isn’t any different from television. The same forces are at play trying to balance consumer’s needs with producers needs. Unfortunately, many comic book publishers are falling into the same trap of extending old fashioned business models to the digital world. Those models will work to a degree, but they will also counterproductively drive piracy. Consumers want to give producers money for good that they enjoy, but they aren’t going to do it in the same way. New models like micropayments and subscriptions are needed in the digital world where the incremental costs are so low.

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