‘Game Of Thrones’ Big Budgets Bring Huge Success; How HBO Series Makes Money With High Cost Per Episode

The world of HBO’s “Game of Thrones” is expansive, and expensive. There are multiple realms, dozens of characters, constant plot twists -- and dragons. But the real-world universe where “Game of Thrones” is made is equally far-reaching. The fantasy series is big business, and the scale of the production is unique for a television show.

The making of “Game of Thrones” costs plenty, with the per-episode budget averaging $6 million. In comparison, Netflix’s original shows cost an average of only $3.8 million to $4.5 million per episode. The show has been expensive from the beginning, with the pilot costing more than $10 million and the first-season budget reaching a staggering $60 million. That’s in the range of many big-studio, theatrically released movies. While “Game of Thrones” is not the most expensive show ever on television, or even HBO (HBO’s “Rome” averaged $10 million per episode before being canceled after one season), it is indisputably burning through a lot of money, enough to be considered the third most expensive show of all time.

Part of the budget is paid for by Northern Ireland Screen, a government body promoting film and television production in that territory. The agency has reportedly paid $15.3 million of the show’s budget over the past four seasons in exchange for an estimated $108 million that the show’s production brings to the area.

And the budget is not the only lavish thing about the “Game of Thrones” production. The series also films in range of diverse locations unheard of for television. Over its first four seasons the show has visited Ireland, Scotland, Malta, Croatia, Morocco and Iceland. That fact, combined with special effects teams, scores of costumes and elaborate sets (all of which factor into the enormous budget), and the production can be overwhelming.

Is “Game of Thrones” worth all the fuss and expense? The ratings seemed to suggest so. The Season 4 finale in June 2014 pulled in 7.1 million viewers and the show has hit 7.2 million on multiple occasions. But HBO is a subscription-based channel, not as beholden to ratings, and with no ad revenue specific to “Game of Thrones,” so how are all the expenses justified?

HBO’s shows -- with such illustrious predecessors as "The Sopranos" and "The Wire" -- are judged on their ability to create a buzz that generates additional subscribers, and “Game of Thrones” has been wildly successful in doing that. The show has the fifth-largest Twitter following of any television show, with fans tweeting wildly about each new character death and revelation. “Game of Thrones” is also the most pirated television show in the world, which cuts into profits but eventually generates new fans and buzz that turns into more subscriptions for HBO. Time Warner (NYSE:TWX) CEO Jeff Bewkes, head of HBO's parent corporation, has said “Game of Thrones’” piracy popularity is “better than an Emmy.”

Profits from “Game of Thrones” spill over into other industries as well. The publishing industry has benefited greatly from the show, with the “Song of Ice and Fire” book series’ sales getting a boost between the premiere and finale of each season. The show’s first season made the box set with the first four books the only fiction entry on Amazon’s bestseller list. “Game of Thrones” has also spawned profits in merchandising as fans snap up costumes and toys inspired by the series.

“Game of Thrones” is a gold mine for HBO, which owns the series outright, giving it maximum profits from the show’s success. The show is both a ratings juggernaut and a catalyst for sensational Internet buzz, both of which mean money in HBO’s pocket. No matter who sits on the Iron Throne in the story, “Game of Thrones” is a king in its own right on television.

What do you think "Game of Thrones" has planned for Season 5? Tweet your thoughts to @Ja9GarofaloTV.