I’ve pirated stuff.
I have a feeling this is one of those things that most people have done. Perhaps it was wholly unintentional—as when a couple of relatives of mine “accidentally” downloaded some music from Napster back when that was a going concern. Perhaps it was just a couple of things that were way too difficult to get anywhere else. Or perhaps it was a whole bunch of things, because, yes, some people are super pirates, and though there are only a few of them, it’s easy to see why the entertainment industry is so obsessed with stopping them. The point is: I was a freshman and sophomore in college when Napster was a big deal, so of course I’ve pirated stuff. Those were the golden days of pirating weird shit you heard about once and just had to seek out.
And, yeah, I’ll admit I’ve pirated since then, though certainly not at the level I did in those days. My motives range from what I’d consider to be pretty damn pure (this is completely unavailable in my country of origin, and I’d really like to see it and share it with others) to slightly less pure (well, the album won’t be out for a couple of weeks, and I’m going to buy it anyway) to almost completely despicable (who wants to pay for premium cable anyway?). I’m not one of those people who tries to justify these decisions. I know what I’m doing occupies, at best, a legal black hole. I know that there are any number of arguments for how media companies are stupid—copyright law is a complete sham, no one’s adapting to the digital frontier quickly enough, etc.—but I also know that invoking these arguments doesn’t somehow magically make what I’ve done pure. I’m taking stuff that doesn’t belong to me, and I’m not paying for it. Regardless of whether I plan to pay for it eventually or would pay for it if someone would make it available to me, I don’t somehow think I’m striking a blow against the tyranny of big Hollywood.
All of this has been rumbling around in my head since I saw last week’s Oatmeal cartoon about the struggles of the author to watch HBO’s Game Of Thrones online. The cartoon has been much discussed, from points-of-view both pro and con, and yet there’s a point I don’t think anybody has raised: The reason the hero of the cartoon can’t watch Game Of Thrones legally yet is because the system set up to produce Game Of Thrones only works if there’s a window when people pay a premium to watch that content. HBO, which has flirted with putting its stuff on iTunes from time to time (often at a more expensive price point than other things on iTunes), is one of the dominant entertainment companies on the television landscape, but it’s all too easy to forget that HBO isn’t in the content-generation business; it’s in the subscriber-attraction business.
This is something all of TV is wrestling with in this era when pirating gets easier and easier, and digital streaming alternatives have yet to figure out a way to become profitable. The broadcast networks, by and large, do their best to make sure their stuff is available online because, well, they aim to hit as many viewers as possible (and getting shows online adds to the Nielsen numbers for them eventually). Yet there’s no indication that advertising for online web streams is going to raise the kind of money networks need to produce the sorts of content they do any time soon, at least if Hulu’s original programming, which is cute but pretty cheap, is any indication. The major networks are still in the advertiser-attraction business, and they don’t show any signs of trying to get viewers to pay a fee to watch their favorite shows online without ads or a day before everybody else (as some have suggested).
It’s trickier over in cable. A basic cable network like FX or USA makes its money from a combination of fees paid to the company by cable providers and advertising. This gives those networks a nice cushion of cash to start from (those cable provider fees), but it also requires them to create programs that are going to keep people paying their cable provider for a package of channels. This is largely why so many cable shows have such long delays toward getting programs up on streaming sites. If viewers are watching FX’s shows on Hulu, they’re not paying their cable subscription package, and the cable providers aren’t making any money. For a broadcast network like NBC, piracy is a concern, but it’s a relatively minor one when looking at the changing ways television does business. (Much more pressing is figuring out a new way to measure the amount of people watching a show and its ads, first-run, on DVR, and online.)
For a basic cable network, piracy is a much more urgent concern because many pirates are those who’ve “cut the cord” and eliminated cable from their homes entirely. (I should state here that I’m dealing entirely with the U.S and Canada here. Foreign pirates pose entirely different problems for U.S. networks.) Every time someone does this, it decreases the amount of money paid to cable providers, thus decreasing the amount of cable providers who pay fees to pick up FX, and so on. Theoretically, at least, it creates a vicious cycle wherein original programming—which is expensive—is the first thing to go.
The problem is even more pronounced over at HBO, Showtime, and Starz. HBO, at least, has long based its model on the idea that a certain amount of people—more than 20 million of them at last check—will pay for the rights to watch the network’s highly acclaimed programming first-run. Those subscribers, in recent years, have also gotten access to the network’s HBO Go, a streaming site that contains nearly every show in HBO’s history, as well as whatever movies the network has the rights to for that period. (Numerous cable companies have made HBO Go unavailable to their subscribers, recognizing—correctly—that it probably represents the cable-less future of the network. They’re being idiots.) The network then releases its shows on DVD around a year after they initially debut.
This model has been obscenely profitable for HBO, and the network has poured much of that cash back into programming development. The steady subscriber base ponying up around $15 a month (give or take) provides a solid cushion for the network to base its program development on, while the long tail of DVD releases creates an effect where a show like The Sopranos continues to make the network solid money years after it went off the air. The network has shifted this somewhat, perhaps to convince people to subscribe in the midst of a recession, as the first season of Boardwalk Empire didn’t hit DVD until after the second season ended. But for the most part, this model is obeyed. For instance, Game Of Thrones, which started this whole discussion, comes out on DVD (and iTunes and Amazon and so on) in mere days.
The problem HBO (and the other premium cable channels) faces is that it’s boxed in by its need to be in bed with cable companies. The easiest solution to the problem posed in the Oatmeal cartoon is simply to make HBO Go available to anyone who wants it, for a monthly fee that would probably be slightly larger than what the monthly fee for the TV network is (to offset any costs lost from cable providers). The problem is that if the network does this, it will be seen as declaring war on the very providers who keep it coming into people’s homes. Even though it seems, to a generation raised on the Internet, like everybody watches stuff on the Internet all of the time, the vast majority of Americans still consume their entertainment on TV. Without the cable companies beaming HBO into those people’s homes, the network loses subscriber fees, which robs it of the ability to program anything beyond cheap movies.
The real fear for HBO is similar to the real fear for FX: If too many people start watching online (legally or illegally), then the network will lose the money it uses to develop the programming that makes HBO a must in many homes. HBO is the market leader because it’s developed a reputation for having the best, most cutting-edge programming on TV, programming that includes hits like Game Of Thrones, yes, but also far less-watched, riskier programming like Enlightened, Treme, and Luck. Unintentionally, HBO has boxed itself into a corner where it needs to keep following the old model—even if it increasingly makes less sense—if it wants to keep making the kinds of programming that made the old model work so well. The kind of shows HBO makes are expensive. Game Of Thrones costs, conservatively, around $5 million per episode, and that’s not including the costs from the pilot’s set construction, which are spread over the length of the production. The only way to find that kind of money continues to be in the subscriber model. There’s a reason HBO has been by far the network that acts most quickly to stop Internet piracy of its programming. If those shows are out there for free, it chips away at the whole business model.
The answer to many people is simply that HBO should make its programming available on iTunes or DVD more quickly. But this ignores the fact that HBO’s subscriber base isn’t just there to fund its hits but also its more experimental programming and its new pilots, which go through many iterations. (The Game Of Thrones pilot you saw last year was almost completely reshot.) If the only show you want to watch is Game Of Thrones, it would probably be fine by you if the network stuck it on iTunes every week—perhaps a couple of days late—at a premium. And there’s no question that if HBO could get every Game Of Thrones viewer to pay $5 for an iTunes download of each episode, it would make back at least its production budget for the show (though it wouldn’t turn a profit). But there’s a distinct lack of stability there, a lack of stability that prompts networks to stop taking chances on riskier, more expensive programming, like Game Of Thrones.
I came into this piece with the idea that there was an easy answer here: Be more patient. The Internet has created a largely immature desire to have everything you’ve ever wanted now, and if it’s not available now, well, who cares about the companies who funded that entertainment in the first place? For the most part, I find this sort of behavior—and the self-righteous chest-thumping that too often goes along with it—distasteful. (I suppose if I had my druthers, Internet pirates—again, like myself—would simply be a little more embarrassed and shameful about what they do, like people who get caught going 90 in a 65 mph zone.) But at the same time, I can see the arguments that because the Internet has made these sorts of things available right away, they should be available right away. The old ways are dying, and even if it means a rough decade for a company like HBO and the many daring shows it funds that I love, the network will be stronger in the long run if it embraces the obvious future right now. I see someone in that Oatmeal cartoon who can’t wait a couple of weeks to see what he wants to see, but I also see a generation—my own—raised to find major media monoliths that are slow to get with the times incomprehensible, like radio broadcasters laughing off television in the late ’40s.
It’s been argued that Hollywood has overblown the threat it receives from Internet piracy, and, to be sure, the number of people pirating works is substantial, but not nearly as large as the number actually watching on TV or in movie theaters. Piracy has always represented more of a potential threat to a network like HBO, which takes Internet piracy seriously enough to actively attempt to stop it, unlike many other networks. (My numerous friends with cease-and-desist letters from the network will attest to that.) It also clearly sees that there’s an audience for its programming online, because HBO Go might be the single best-designed streaming site out there. But it’s inadvertently trapped itself with a model that all but requires a virtue that the Internet has virtually eradicated: patience. I suspect this all reaches a point in the next decade where HBO either kisses traditional cable companies goodbye and follows Netflix off into online-based subscriptions or where the network gets trapped in its own vicious circle and dragged down by its own massive success. So, yes, I’ll advocate patience, I think. HBO has been a force for good in the television world for almost two decades. I get why you’re cutting your cords, but isn’t it worth waiting a little while for a DVD in that case?