Yesterday Time Warner Inc. — the owner of HBO — released its quarterly earnings.

During the earnings call, Tuna Amobi of S&P U.S. Equity Research Services asked CEO Jeff Bewkes what he thought of "Game of Thrones" being the most pirated show on television.

We were tipped off about the exchange from the Game of Thrones blog White Harbour, which published an early transcription of the key quote earlier today.

Still, the whole response is fantastic. Essentially, Bewkes goes so far as to say that internet piracy is downright awesome for HBO.

HBO grows by gaining subscribers, and it gains subscribers mostly by word of mouth. In the old days, that word of mouth included neighbors inviting neighbors over to enjoy their HBO subscription, or even cases of people stealing cable just to score HBO.

Well, in their 30 year experience, all that "content theft" has done nothing but help HBO gain subscribers and create more high-investment content.

It's somewhat funny that sites like The Pirate Bay are not only driving more viewers to subscribe to HBO, but Bewkes goes so far as to say that they actually save a fortune on advertising costs because of this word-of-mouth side effect of bittorrent.

Here's the full exchange from the end of the conference call, made available by Time Warner here.

Tuna Amobi: Game of Thrones has obviously had a phenomenal performance, but one other issue that has come up with regards to that title is the online piracy. I think by all accounts one of the highest pirated shows and I'm not aware what you guys have done to kind of address that. It seems that you have viewed it as kind of a compliment in terms of looking the other way so much. Is that the right way of thinking? Kind of a paradigm shift with the piracy and its impact on shows going forward that what you've done.

[...]

Time Warner CEO Jeff Bewkes: To end on Game of Thrones on HBO, I have to confess I think you're right. I have to admit, our first reaction to how much people want to watch it — now first of all it's got ratings of 14, 15 million — a lot of it is VOD [video on demand] on your TV system, an increasing amount of it is VOD on your [HBO]Go Service.

It's just really strengthening not just the image, but the engagement of our subs [subscribers] with HBO programming, it's also getting them familiar and more involved with using the video on demand capabilities of HBO and don't forget, the television part. The part where you go to your house and you turn on that big screen TV watching it over the video plan, also the HBO Go service where Game of Thrones is the leading introduction manual for how to use HBO Go which more and more people are doing.

Then go to people watching it who aren't subs, it's a tremendous word of mouth thing, the issue would be if they were doing it and because they could get it not subscribing, we don't see much of that.

Basically, we've been dealing with this issue for years with HBO, literally 20, 30 years, where people have always been running wires down on the back of apartment buildings and sharing with their neighbors.

Our experience is, it all leads to more penetration, more paying subs, more health for HBO, less reliance on having to do paid advertising — we don't do a whole lot of paid advertising on HBO, we let the programming and the views talk for us — it seems to be working.

If you go around the world, I think you're right, Game of Thrones is the most pirated show in the world. Well, you know, that's better than an Emmy. (laughter)





(h/t) White Harbour