Emmy Awards for Piracy

HBO’s fantasy series “Game of Thrones” has won numerous awards, including 8 Emmy Awards (full list on Wikipedia). Yet, according to HBO parent Time Warner CEO Jeff Bewkes, the fact that Game of Thrones is also the single most pirated TV show in the world is “better than an Emmy.”

I have written before, based on research done by my Duke professor, that adding digital rights management – the annoying technology that protects music and movies from copying – reduces not only piracy but also actual sales for a net loss. However, one would expect even the most open-minded content executive to prefer maximum legitimate sales and zero privacy, let alone not to ever say that the piracy may be a good thing!

And yet, Bewkes, bucking the luddite trend among studio executives, says openly that the piracy is great.

It appears that the Time Warner CEO understands that piracy can be very valuable free marketing to a very valuable potential audience.

Most people, and especially those studio execs, tend to look at the viewing audience as part of one of two groups:

  1. Paying Customers: these are the people who pay for and watch the content.
  2. Pirates: these are the people who do not pay for the content but watch it anyways.

If only those Pirates could not get access to the pirated copy, they would quickly cough up the cash and pay for content.

Bewkes believes that there are actually three audiences:

  1. Paying Customers: people who pay for and watch the content.
  2. Potential Customers: people who watch pirated content and might become Paying Customers.
  3. Never Customers: people who watch pirated content but will never become Paying Customers.

Nothing ABC, NBC, HBO, Universal, RIAA, MPAA or anyone else does will turn Nevers into Payers, or stop them from watching pirated shows. But the Potentials will not just become Paying because pirated content is unavailable. If they wanted to pay, they would have done so already. Many of them require more than trailers, reviews and recommendations. They require some real shows, something to get them hooked, to turn them into Paying.

Cut out the piracy, and you don’t turn Pirates into Payers; you turn Potentials into Nevers. On the other hand, with some piracy, the Nevers may benefit unfairly, but you have an opportunity to turn Potentials into Paying.

Perhaps Bewkes is right, perhaps being the #1 pirated show is better than an Emmy. And perhaps there is some hope yet for the content industry.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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