Sunday, August 27, 2017

Give us your money or we'll pirate your shows a few days early

Recently HBO suffered a data breach by parties who then tried to extort money using the threat of publicly releasing, among other things, Game of Thrones episodes and internal emails.  HBO, despite having initially offered a much lower sum than demanded, reportedly in a bid to buy time, ultimately did not pay the extortionists.  The Grauniad* has what looks like a pretty good summary on this one.

One thing that jumps out of this is that HBO was not particularly concerned with having episodes of its flagship show leak early.  There are probably several reasons for this.  HBO subscribers aren't paying per view, but monthly for the service as a whole.  If someone were able to repeatedly steal HBO productions and escape prosecution, that would likely be a problem.  Leaks of a few select episodes probably not.

Even if you can somehow make repeatedly stealing HBO content work, you're basically competing with HBO and the cable channels at distributing HBO content.  That's not a game I'd personally want to get into. Your milage may vary, but bear in mind that people are already pirating HBO content after it airs.  It's not clear how taking the extra risk to steal from HBO directly is providing that much of a competitive advantage.

More broadly, this all pushes back against the idea that, to make money selling content in a world where content can easily be copied, you need to provide something "live", like breaking news, live sporting or musical events, interactive games and such.

Of course, people can and do make money this way, but clearly that's not the only way.  HBO and many other content providers have done well with more traditional productions.  People seem happy to pay a modest monthly fee in order to see comedy, drama, documentaries and whatever other genres.

In principle there's a free-rider problem here in that people can get the same content, albeit generally illegally, without paying.  In practice, the problem appears tolerable.  HBO's refusal to pay a ransom to prevent GOT episodes from leaking underscores this.  People are apparently content to pay for the brand rather than the ability to access any particular bits at any particular time.

*I tend to use the Private Eye names for the major British newspapers, particularly the Grauniad and Torygraph, because, well, sorta funny, but also fairly apt.  The Telegraph is well known for its Tory leanings and the Guardian, however well it's built its brand as an international news outlet, is still prone to the sort of typo that led to the nickname in the first place.  But on the other hand, if your instructions as editor are to "carry on as heretofore," I suppose that has to include the tyops.  Sorry, typos.

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