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HBO Programming President on Game of Thrones ‘Piracy’: It’s a Compliment and Doesn’t Hurt DVD Sales

Last week, Rob Pegoraro wrote on DisCo about the various arguments people make about HBO’s strategy of distributing “Game of Thrones,” the season premiere of which just set a record Sunday for the most simultaneous infringing downloads.  According to TorrentFreak, which tracks traffic over the BitTorrent protocol, “These are mind boggling numbers that we’ve never seen before.”

Certainly, some amount of this downloading is due to HBO streaming only being lawfully available for purchase along with a cable subscription, at a time when TV consumers are increasingly ‘cutting the cord.’  (Game of Thrones DVDs have thus far been available for purchase about eight or nine months after the season ends.  A chart comparing the dates each season began and ended, with the release date for that season’s DVD, is available here.)  It turns out HBO is fully aware of this problem.  A new article on Entertainment Weekly quotes HBO programming president Michael Lombardo:

“I probably shouldn’t be saying this, but it is a compliment of sorts,” Lombardo said. “The demand is there. And it certainly didn’t negatively impact the DVD sales. [Piracy is] something that comes along with having a wildly successful show on a subscription network.”

The show is currently, on a per-season basis, the network’s top money-earner despite widespread piracy of the show, the executive confirmed. “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,” Lombardo said.

It thus appears that even while HBO is leaving money on the table by not catering to cord-cutters (many of whom want the premium network to take their money), Game of Thrones is still the network’s most financially successful show.  The fact that content creation is increasingly profitable in the digital age — notwithstanding that there is substantial infringement — is nothing new.  It is consistent with the new European Commission study I recently wrote about, concluding that online infringement drives music sales, and with the recent “Sky Is Rising” studies demonstrating that digital content distribution is contributing greatly to the health of the entertainment industry.

Lombardo’s quotes demonstrate that HBO is well aware of consumers’ preferences, which is encouraging.  Doing more to serve those preferences would create additional revenue streams, and likely diminish these torrent statistics.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.