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Netflix Now Has Higher Subscription Revenue Than HBO

Netflix CEO Reed Hastings has long stated that he considers HBO -- not cable operators -- Netflix's primary competitor, even though HBO has yet to offer a standalone streaming service. Last year, Hastings stated his goal was to "become HBO faster than HBO can become us." In other words Hastings wanted Netflix to grow larger -- and offer a better selection of original and licensed content -- before HBO finds the courage to make the obvious and inevitable step toward a standalone broadband streaming platform.

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Netflix has made great strides in that regard, Hastings bragging on Facebook this week that Netflix surpassed HBO in total subscriber revenue ($1.146 billion to HBO's $1.141 billion) last quarter.

"They still kick our ass in profits and Emmy's, but we are making progress," crows Hastings. "HBO rocks, and we are honored to be in the same league."
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bigballer
@205.214.216.x

bigballer

Anon

let's see.

Netflix: Fairly cheap (8.99 a month), doesn't require cable, can be viewable anywhere (phones, laptops, tvs, game consoles, very large selection

HBO: pretty expensive, must be coupled with cable, can only watch through tv, more $$ for HBO GO.

mhm, which would i really want??
devolved
join:2012-07-11
Rapid City, SD

devolved

Member

Re: let's see.

HBO GO comes with your HBO subscription, so no, they're not making more $$ with HBO GO.
78036364 (banned)
join:2014-05-06
USA

78036364 (banned)

Member

Will HBO get it now?

Gee you can offer a stand alone streaming option and make money? who knew?

mackey
Premium Member
join:2007-08-20

mackey

Premium Member

Re: Will HBO get it now?

"They still kick our ass in profits"

So HBO grosses less but makes a lot more profit? Sounds like their model is better.

/M
elefante72
join:2010-12-03
East Amherst, NY

elefante72

Member

Re: Will HBO get it now?

Until your model is disrupted, hence why Netflix is where they are.
HBO gravy train is on the way out.

I am an HBO sub, but get it for free. Sure Verizon must send them a few bones, but not sure that is long-term...

Once Netflix grows to a certain mass they will raise prices and become more profitable.
Cobra11M
join:2010-12-23
Mineral Wells, TX

Cobra11M

Member

Re: Will HBO get it now?

well of course.. everyone knows Netflix will eventually hit the $15+ a month easy.. but by that time HBO could be done with, why pay for HBO when you can get Netflix and have original content and other content
ITGeeks
join:2014-04-20
Cleveland, OH

ITGeeks

Member

Re: Will HBO get it now?

And it has shown that when Netflix raises prices they do lose customers. They're not adding that much content to even show why they need to charge $15 per month. If they had more original content and such, yes, but currently NOPE! And it won't be for years to come. Hell they only have a few titles from Tyler Perry. Even new titles or ones that are years old- Netflix can't even get.

dnoyeB
Ferrous Phallus
join:2000-10-09
Southfield, MI

dnoyeB

Member

Re: Will HBO get it now?

Right. More like than Netflix raising their rates is HBO dropping theirs and/or going independent. I believe Netflix keeps claiming HBO as their competitor because they want to see them in the marketplace. Netflix is likely driving HBO profits up at the moment.

rothan
Premium Member
join:2000-11-07
Rowley, MA

rothan to ITGeeks

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to ITGeeks
said by ITGeeks:

And it has shown that when Netflix raises prices they do lose customers. They're not adding that much content to even show why they need to charge $15 per month. If they had more original content and such, yes, but currently NOPE! And it won't be for years to come. Hell they only have a few titles from Tyler Perry. Even new titles or ones that are years old- Netflix can't even get.

Netflix isn't coming up with Original content? I'd beg to differ with Orange is the New Black, House of Cards, The Fall, etc.

dnoyeB
Ferrous Phallus
join:2000-10-09
Southfield, MI

dnoyeB to 78036364

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to 78036364
Remember HBO started as standalone. They know exactly how to do it. The only reason for them not to do it is because they are getting paid more than they could if they did it. My guess is they are getting a lot of that extra cable money supposedly for all those extra channels. I'm guessing they are getting paid regardless of how many subscriptions they have.

HBOGO is probably just a shot across the bow of the cablecos to remind them to keep paying up.

Just my guess.

jmn1207
Premium Member
join:2000-07-19
Sterling, VA

jmn1207

Premium Member

How About Profits?

How much of that revenue goes back into licensing agreements for Netflix?
78036364 (banned)
join:2014-05-06
USA

78036364 (banned)

Member

Re: How About Profits?

HBO doesn't have licensing agreements?

jmn1207
Premium Member
join:2000-07-19
Sterling, VA

jmn1207

Premium Member

Re: How About Profits?

Certainly, but is HBO's current model more profitable, and by how much? Why would HBO break their traditional format if it stands to make a significantly higher profit, despite having similar revenue with a different business model?
78036364 (banned)
join:2014-05-06
USA

78036364 (banned)

Member

Re: How About Profits?

said by jmn1207:

Certainly, but is HBO's current model more profitable, and by how much? Why would HBO break their traditional format if it stands to make a significantly higher profit, despite having similar revenue with a different business model?

because they could make even MORE profit. Remember the content owners once though the VCR would REDUCE profits and try to get it banned. Now they couldn't exist without the home video market. How many billions in revenue were lost all those years fighting the new technology instead of embracing it?

battleop
join:2005-09-28
00000

2 recommendations

battleop

Member

Re: How About Profits?

said by 78036364:

How many billions in revenue were lost all those years fighting the new technology instead of embracing it?

Going by the typical Bittorrenter train of thought, none.

Shadow
@209.44.154.x

Shadow to 78036364

Anon

to 78036364
But of they start a streaming service. They would have to put there HBO shows on there. Once, you can stream those shows through there service people would have no use for the HBO channels on tv. So the channels stop making a profit as they lose subscribers. So in all their profits would go down because you have to buy a ton of licensing agreements.
rahvin112
join:2002-05-24
Sandy, UT

rahvin112 to jmn1207

Member

to jmn1207
This post is about revenue, not profit, they are substantially different things. Even though Netflix may be bringing in more Revenue than HBO they are likely to be substantially less profitable if for no other reason than HBO has no sales or collections departments and the vast majority of their content is distributed at no cost to HBO because it's all contracted out to the cable companies.

Hastings still has a bit to go but I hope he's successful. HBO won't make the move till it's to late precisely because they are owned by a cable company.

PlusOne
@73.160.110.x

PlusOne

Anon

Re: How About Profits?

said by rahvin112:

HBO won't make the move till it's to late precisely because they are owned by a cable company.

HBO is owned by Time Warner, not TWC. TWC is a publicly owned company and has no corporate owner.
78036364 (banned)
join:2014-05-06
USA

78036364 (banned)

Member

Re: How About Profits?

said by PlusOne :

said by rahvin112:

HBO won't make the move till it's to late precisely because they are owned by a cable company.

HBO is owned by Time Warner, not TWC. TWC is a publicly owned company and has no corporate owner.

Quit injecting facts in here. You ruined a perfectly good rant.
ITGeeks
join:2014-04-20
Cleveland, OH

ITGeeks to PlusOne

Member

to PlusOne
TWC does, TW still owns the majority shares in the company.

Nope
@162.150.142.x

Nope

Anon

Re: How About Profits?

This was true. In 2009, before TW spun TWC off. Not so much now. After 5 years of being publicly traded as a separate company, TWC--like most Fortune 500 companies--is predominantly owned by mutual funds and institutional investors.

PlusOne
@73.160.110.x

PlusOne

Anon

Re: How About Profits?

said by Nope :

This was true. In 2009, before TW spun TWC off. Not so much now. After 5 years of being publicly traded as a separate company, TWC--like most Fortune 500 companies--is predominantly owned by mutual funds and institutional investors.

+1
HBO is no longer owned by a cable company.
silbaco
Premium Member
join:2009-08-03
USA

silbaco to rahvin112

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to rahvin112
HBO won't make the move until they actually have a reason to. Their current business model may not be favorable to the internet bloggers, tech forum posters, and occasional cord cutters. But it is clearly working well. They have no reason to try to fix something that isn't broke.

When you make quality exclusive content people are willing to pay for (ex. Game of Thrones) then there is never a time when it is too late.
ITGeeks
join:2014-04-20
Cleveland, OH

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very little. they own/create most of their content.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Great News!

Does that mean they'll finally offer comparable content?
78036364 (banned)
join:2014-05-06
USA

1 recommendation

78036364 (banned)

Member

Re: Great News!

said by elray:

Does that mean they'll finally offer comparable content?

How do you mean? if you mean newer movies. That's not Netflix fault. The movie studios CHOOSE to fore to make Netflix wait IF they let them have any movies at all.

I also will say HBOGo has less than 300 movies at any one. time FAR fewer than Netflix.

Quality
@68.42.244.x

Quality

Anon

Re: Great News!

I'll take a smaller movie library with a lot of quality choices over a large one with mostly crap. What gets labeled as quality and crap is obviously subjective but I'll take the selection of movies HBO has over Netflix any day.
elray
join:2000-12-16
Santa Monica, CA

elray to 78036364

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No, Netflix CHOOSES not to pay the studios enough money to obtain those titles; if they have surpassed HBO in revenue, then, what's the problem?

DeathK
Premium Member
join:2002-06-16
Cincinnati, OH

1 recommendation

DeathK

Premium Member

Re: Great News!

said by elray:

No, Netflix CHOOSES not to pay the studios enough money to obtain those titles;

That's not the way it works. The big content owners have to be open to their latest stuff being on there. The fact is they aren't. They want to maximize profits and not cannibalize home video sales. To expect Netflix to write blank checks to try to change content owners' minds is utterly ridiculous. The amount they pay for the content they do get is bad enough (and extortion attempts from owners like STARZ is laughable).

I'm sick of people giving content owners a free pass and putting the blame squarely on the shoulders of services like Netflix, Amazon, and Hulu. The content owners dictate what is available, where it's available, and when you can watch it. The buck stops with them (if you remain legal).

Jim Kirk
Premium Member
join:2005-12-09
49985

1 recommendation

Jim Kirk

Premium Member

Re: Great News!

Don't confuse elray with facts.
Kamus
join:2011-01-27
El Paso, TX

Kamus

Member

Re: Great News!

eltroll
elray
join:2000-12-16
Santa Monica, CA

elray to Jim Kirk

Member

to Jim Kirk
Don't confuse Jim Kirk with math.
silbaco
Premium Member
join:2009-08-03
USA

silbaco to DeathK

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to DeathK
While that is true, the amount Netflix is willing to pay for the latest content isn't exactly enticing compared to other avenues. They could get more recent content if they were willing to pay more competitively.
elray
join:2000-12-16
Santa Monica, CA

elray to DeathK

Member

to DeathK
I am the last person to give content owners a free pass - even going so far as to suggest we might need to consider (threaten) legislation to pry content loose and encourage wholesale streaming options.

But the bottom line is just that - Netflix isn't willing to pay.
Until they are, comparing them to HBO is just folly.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

HBO is unparalleled

In the quality of what they produce. Netflix is doing some amazing stuff, but I'm not sure that Netflix is really directly competing with HBO. They are competing more than Netflix is with regular pay TV though. However, I still want to have both...
houghe9
join:2008-02-27
Lexington Park, MD

houghe9

Member

Re: HBO is unparalleled

i agree about the content they produce.

If netflix plays it smart they will have the brand loyalty and all of the smart tvs with their software. they are teaching people how to become cord cutters. i just hope they don't ruin it like they almost did when they were trying to split up while raising prices.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

Re: HBO is unparalleled

I'm not sure that they're teaching people to be cord cutters. I see it as a supplemental service to pay TV.

chlen
Ethically Challenged
Premium Member
join:2001-01-16
Saratoga, NY

chlen

Premium Member

Need HBO without cable....

HBO has a great offering and the name.

I have been greatly enjoying the HBO GO product, using the name/pass of a friend of a friend of my wife, that I now shared with my friends and coworkers.

We like the product but dont have cable and/or HBO.

Would gladly pay HBO but they dont want my money.
donaldk
Premium Member
join:2000-10-19
Halifax, NS

donaldk

Premium Member

Re: Netflix Now Has Higher Subscription Revenue Than HBO

Netflix + VPN with moreflicks search = success

Keep it up Netflix! Drive the nail into big Cable.
chene209
join:2008-09-07
Merced, CA

chene209

Member

i love netflix more than my mom

love how netflix is making every big company scratch there heads.i just recently got the 50mb+tv basic cable tv package from comcast.wow...just wow.local channels plus 3-4 cable channels plus the browsing on the slow jct 2224 box.some dude told me the box is 15 years old.anyways u can tell that dn,dtv and cm are feeling the heat big time.i noticed they are sending ads in mail more now.it's netflix baby!