RUSSELL BELL

Is it profitable ?

46 posts in this topic

How is Game of Thrones still profitable ? Its recently been revealed that the average Game of Thrones episode now costs north of 10 million dollars to produce, taking into account dvd sales and viewers. Its still has far less viewers than The Walking Dead in the US, and dvd sales cannot possibly recoup its 100 million dollar budget on its own. 

Share this post


Link to post
Share on other sites

Game of Thrones is one of the most - if not the most - profitable television shows on TV. It gets an average total viewership in the US of over 20 million (including HBO GO) per episode, sells very well internationally (better than any other show actually), is one of the best shows for merchandising, and has since it has come out been the top-selling TV on DVD and Blu-ray by a significant amount.

It may not have the viewership of The Walking Dead, but GoT is on premium cable versus regular cable, and so that's to be expected. Since the last episode of GoT, GoT is the most watched show in HBO history, with room to spare.

Here's an article on its profitability:

http://fortune.com/2015/11/04/time-warner-earnings/

 

Quote

While TV and video games did well for Time Warner, however, the real magic came from HBO, which continues to be one of the main beneficiaries of the move away from tiered cable packages to on-demand viewing and cord-cutting by millennial audiences. Revenue at the premium network climbed by 5% to $1.4 billion, thanks to growth in licensing revenue and a 4% increase in subscription revenues.

Time Warner noted that its marketing and technology costs rose as a result of the launch of its HBO Now standalone streaming service, but distribution and programming costs were lower. That pushed operating income for the HBO unit up by more than 35% to $519 million, making it one of the most profitable members of Time Warner’s stable.

Along with Netflix NFLX 0.04% , HBO is becoming one of the most popular paid TV services, thanks to shows like Game of Thrones. And the network is branching out into other kinds of content as well: For example, it just signed an innovative four-year digital deal with Jon Stewart, the former host of The Daily Show, who will be producing short online video clips on a variety of topics for the company.

At the time of this article (circa season 5), the episodes were about 8 million per, with Hardhome and Dance costing about 15 mil each. So season 6 is more expensive than season 5, but not way more expensive.

Share this post


Link to post
Share on other sites
14 hours ago, RUSSELL BELL said:

How is Game of Thrones still profitable ? Its recently been revealed that the average Game of Thrones episode now costs north of 10 million dollars to produce, taking into account dvd sales and viewers. Its still has far less viewers than The Walking Dead in the US, and dvd sales cannot possibly recoup its 100 million dollar budget on its own. 

Why do you care? 

Share this post


Link to post
Share on other sites
44 minutes ago, Barbossa said:

Why do you care? 

Because I'm a fan of the show and I like to see it do well. 

Share this post


Link to post
Share on other sites
1 hour ago, RUSSELL BELL said:

Because I'm a fan of the show and I like to see it do well. 

And you figured them pumping tons of money in the show, is evidence of the contrary? You should stop playing accountant on the internet.

Edited by Barbossa

Share this post


Link to post
Share on other sites
4 hours ago, RUSSELL BELL said:

Because I'm a fan of the show and I like to see it do well. 

The fact that it is on its 6th season when most shows never see the light of day pretty much answers your question.  This may have been a concern when the pilot went over-budget, but it's most definitely not a concern now.  Also, HBO cares about selling subscriptions...not beating viewing numbers for basic cable tv shows.  And GoT is their headliner for selling those subscriptions.  If GoT weren't profitable, HBO wouldn't have said things like "We want Game of Thrones to last 10 seasons or more." 

Edited by sj4iy

Share this post


Link to post
Share on other sites
19 hours ago, RUSSELL BELL said:

How is Game of Thrones still profitable ? Its recently been revealed that the average Game of Thrones episode now costs north of 10 million dollars to produce, taking into account dvd sales and viewers. Its still has far less viewers than The Walking Dead in the US, and dvd sales cannot possibly recoup its 100 million dollar budget on its own. 

Viewer numbers aren't as relevant for a subscription service like HBO as they are for a regular TV channel like AMC. AMC makes it's money from advertising and the higher the ratings the more they can charge for ad space. HBO doesn't have that issue. If you subscribe to HBO than some of your money goes to Game of Thrones regardless of whether you watch it or not. Just looking at some quick numbers, it appears that as of 2014 HBO had over 100 million subscribers. HBO Now is $15 a month and I get HBO through my cable service for $20. I have no way of knowing how much of my charge gets through to HBO, but let's assume they get $10 for every subscription. Assuming that, they'd make about $1 billion in revenue per month solely from subscriptions. Factor in merchandise sales and other sources of revenue and I think they're doing just fine.

Share this post


Link to post
Share on other sites

I imagine there are plenty of people like me who maintain an HBO Now subscription solely during GOT seasons. They study that and do the math and they'll know where to put their $.

Share this post


Link to post
Share on other sites

Bottom line, from my B.S. Math degree, and my minimal knowledge in accounting, HBO is making a killing.

Share this post


Link to post
Share on other sites
On 3/31/2016 at 7:02 AM, RUSSELL BELL said:

How is Game of Thrones still profitable ? Its recently been revealed that the average Game of Thrones episode now costs north of 10 million dollars to produce, taking into account dvd sales and viewers. Its still has far less viewers than The Walking Dead in the US, and dvd sales cannot possibly recoup its 100 million dollar budget on its own. 

Advertising.

Distributors like Fox in Australia pay HBO heaps of money for exclusive rights. The distributors then charge heaps of money for advertising slots around the show, as it has become an event like Superbowl, or AFL.

The real question isn't how does HBO make money but how do advertising companies make money? And how does anyone really know if advertising even works, or is worth what companies pay for it?

 

Also, as mentioned above, GoTs is a massive franchise now and HBO, owning the franchise, gets a cut from all of the official paraphernalia sold - even my T-shirts and stubbie holders are worth something to HBO :D

Edited by ummester
more info

Share this post


Link to post
Share on other sites

The show is still profitable because even as it is very expensive it still cost less than a big action movie and is 5 times as long for  big audience and a ton of revenue streams. 

Edited by 239JMFL34109

Share this post


Link to post
Share on other sites

The sales on T-shirts and bobble heads probably pays for 4 episodes.

Share this post


Link to post
Share on other sites

I don't see how this is even a question? 10 mil per episode for the hottest and best merchandised show around? Easy money.

Share this post


Link to post
Share on other sites

There's also international sales. HBO pre-sold the show around the world before it aired one episode, and apparently that paid for something like 90% of its budget. A lot of those deals were for five years, so they had to renew in the last year or so and most of them paid even more.

In the UK, Sky just renewed a deal with HBO to show Game of Thrones and a few other HBO shows (not even all of them, I don't think) on Sky Atlantic. The first deal in 2011 was worth $500 million. The second deal last year was worth even more. So that's $1 billion to HBO from that one foreign rights deal alone.

Share this post


Link to post
Share on other sites
On 4/5/2016 at 1:34 PM, Ser Not Appearing said:

I imagine there are plenty of people like me who maintain an HBO Now subscription solely during GOT seasons. They study that and do the math and they'll know where to put their $.

You're not the only one.  Although I had a subscription through satellite for seasons 1-5,  I've changed providers since and just signed up for HBO now a few days ago for that very reason.  I'm not sure whether I'll actually keep it after the season ends.  I don't watch much TV at all and only started watching this because I'd read the books (and because I'm ready to know how this story ends).   

Share this post


Link to post
Share on other sites
On 4/20/2016 at 3:13 PM, bb1180 said:

You're not the only one.  Although I had a subscription through satellite for seasons 1-5,  I've changed providers since and just signed up for HBO now a few days ago for that very reason.  I'm not sure whether I'll actually keep it after the season ends.  I don't watch much TV at all and only started watching this because I'd read the books (and because I'm ready to know how this story ends).   

I'm in the same boat.  I subscribe to HBO Now (14.99/month on my smartphone), and get every episode streaming on my tablet as they are playing on regular TV.  After the season, I just simply cancel my subscription.  

I'm actually surprised that they don't INCREASE the budget for the show because of how much they make.  Literally *everything* with a "Game of Thrones" logo on it HBO makes money off of.  DVD's, Shirts, Bobbleheads, Jewelry, Board Games, the additional HBO subscriptions, advertisers...and that's just in the US.  Then you have *all* that also in dozens of other foreign countries across the globe.  Also, don't forget...all these interviews that the stars go to (panels, conventions, talk show appearances etc), they are getting paid to go to them, and HBO is making a % cut of *that* amount as well.  They are going to be raking in money for GOT for a long, long time, even for years after the series is over.

I'd love to see the average cost-per-profit margin for each episode.  I know in my line of work we shoot for a 35% profit margin (at minimum) on our projects, which means if HBO spends 10 million an episode, that would mean they would make 3.5 million in profits (off of however they have their metrics set up).  I'm positive HBO is making WAY more then that per episode, though.....everything combined I wouldn't be surprised if they make 30+ million off of one episode easily.

Share this post


Link to post
Share on other sites
On 5/18/2016 at 10:59 AM, SevasTra82 said:

I'm in the same boat.  I subscribe to HBO Now (14.99/month on my smartphone), and get every episode streaming on my tablet as they are playing on regular TV.  After the season, I just simply cancel my subscription.  

I'm actually surprised that they don't INCREASE the budget for the show because of how much they make.  Literally *everything* with a "Game of Thrones" logo on it HBO makes money off of.  DVD's, Shirts, Bobbleheads, Jewelry, Board Games, the additional HBO subscriptions, advertisers...and that's just in the US.  Then you have *all* that also in dozens of other foreign countries across the globe.  Also, don't forget...all these interviews that the stars go to (panels, conventions, talk show appearances etc), they are getting paid to go to them, and HBO is making a % cut of *that* amount as well.  They are going to be raking in money for GOT for a long, long time, even for years after the series is over.

I'd love to see the average cost-per-profit margin for each episode.  I know in my line of work we shoot for a 35% profit margin (at minimum) on our projects, which means if HBO spends 10 million an episode, that would mean they would make 3.5 million in profits (off of however they have their metrics set up).  I'm positive HBO is making WAY more then that per episode, though.....everything combined I wouldn't be surprised if they make 30+ million off of one episode easily.

This. The budget is low for something with this kind of following, which is part of why it does so well. The actors are probably the main funnel for funds considering how long it was predicted to run and the contracts we can get an idea of. Regardless of what people think, there isn't a crap ton of complex CGI in the show nor is it the expense it used to be. TBH the cgi has never been great, I've seen youtube amateurs do much the same or better

Share this post


Link to post
Share on other sites

10 million is chump change. not even enough to pay for the showrunners wives vibrator repairman.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now