Turning Piracy into Found Money
The Massive Untapped Potential in the Media Industry
Season 7 of HBO’s mega-hit Game of Thrones premiered last week. According to HBO, over 16 million eager fans tuned in to the long-awaited episode, on TV and via the company’s apps.
As impressive as that number is, it’s dwarfed by another: 90 million. That’s how many viewers research firm MUSO estimates caught the episode via Torrents, Kodi boxes, and other illegal streams.
That’s nearly six times more illegal views than legal ones.
If you’re HBO parent company Time Warner, what do you do? Implement more aggressive digital rights management (DRM) to try to keep the content locked down? Sick an army of lawyers on distributors and viewers of pirated streams?
These approaches are very costly, but seldom produce the desired result.
On the other hand, an approach that tries to monetize those viewers could prove far more fruitful, generating millions in new revenue.
Take the Money, Stupid!
If you’re an investor or an executive at Time Warner, what would you rather have at the end of the day?
The satisfaction that fewer people have pirated your company’s content, or millions of dollars in additional profits?
Anyone with an ounce of fiduciary sense would pick the latter, which is very much achievable, and in short order.
Imagine if of those 90 million illegal viewers, even a fraction of them could be monetized? If even a quarter of those viewers payed a single dollar to watch the episode, that would amount to over $22 million in revenue.
Imagine if just a third of those 90 million viewers sat through up to 10 minutes of ads before and during the program. Again, potentially 8 figures in new revenue.
And remember, we’re talking about one episode!
As cable revenues dwindle, adding that kind of revenue over the course of a year would be cause to celebrate. To do so from a single event, with new opportunities for similar numbers with each episode would be an absolute game-changer.
Other shows and other media companies can benefit in the same way, on a smaller scale. Every potential pirate converted into a paying customer is a win.
Opportunity Cost
In order to tackle piracy, it’s important to understand why consumers steal content.
Often, it’s not simply about the money. In many cases, accessing a pirated stream of a show or movie is in fact easier than going through the legal channels.
By that logic, making the legal channels easier and more approachable is one of the most effective ways to reduce piracy.
If a user wants to watch Game of Thrones or another premium show without cable TV, how to do so can be a bit of a mystery to many consumers, who must dedicate time and energy to understanding the multitude of legal streaming options and a complex web of relationships that determines who can stream what and where, before they even reach the first paywall.
Some content isn’t available legally at all without a $100+ pay-TV subscription.
Even less savvy users can often find that it’s less trouble to locate an illegal source than it is to navigate Byzantine OTT options.
It’s been well established that convenience trumps cost, meaning that content providers absolutely can compete with free.
If HBO threw up a simple site, charging a buck or two to pay-per-view for the latest Game of Thrones episode as it aired, not only might they convert some tens of millions of media pirates, they might even attract a wider audience, including those who wouldn’t have pirated it or paid for HBO otherwise.
A free ad-supported stream is also worth considering, even for a premium brand like HBO. A free and legal option to watch would all but squelch its illegitimate rivals. If 90 million people are already watching the show for free, and Time Warner isn’t seeing a cent of revenue for it, being able to monetize those eyeballs represents a very lucrative opportunity.
Making Peace with Piracy
Like many petty crimes, media piracy will never be completely stamped out. There’s always going to be a segment of viewers out there that simply won’t pay for content, and will go to greath lengths to find it for free.
Let them.
The alternative is spending millions, if not billions of dollars, in an eternal and un-winnable game of whack-a-mole.
Already in flux and headed towards a revenue crisis as consumers shop around more, spend less, and abandon traditional pay-TV on a large scale, the media industry can’t afford not to evolve its attitude on piracy.
Time and money once dumped into eliminating piracy is much better spent turning those pirates into paying customers or monetizable eyeballs.
