Netflix takes on HBO

In class we saw that Netflix was victorious in it’s rivalry over DVD rental businesses, most notably Blockbuster.  Now, Netflix’s competition is focused on cable stations with their own streaming networks, such as HBO.

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In previous years, HBO has consistently had more subscribers than Netflix, especially since HBO Go is the only method by which viewers can watch popular HBO original shows, such as Game of Thrones and Girls.

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Despite HBO’s consistent subscribers, the number of Netflix users has grown exponentially.  In fact, Netflix has just recently surpassed HBO’s 28.7 million subscribers.  

What has contributed to Netflix’s growth over the past few years?  Well, other than what was discussed in class, (data from software, the long tail, etc), Netflix has begun to make some recent changes to attract more customers.  Netflix is constantly adding to its wealth of television shows and movies.  Recently, a “Just for Kids” category was introduced to the Instant Queue, allowing children and adults alike to watch both old and new cartoons.

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In response to the practice of sharing accounts, Netflix has offered a new package in order gain from this practice.  The original $7.99/month subscription only allowed up to two simultaneous streams.  The new $11.99 package allows up to four simultaneous streams on one account.  

In addition to the hundreds of thousands of movies and television shows, Netflix has also released its own original series: ‘House of Cards’, ‘Hemlock Grove’ and ‘Arrested Development’. Less than 8,000 subscribers create accounts for the sole purpose of watching these original series, which means that these new shows bring in an influx of customers.  

Although Netflix doesn’t have the capability to stream HBO shows, which allows HBO to maintain its consistent subscribers, Netflix has responded in such a way to create and maintain a fierce competition with successful cable networks.

http://www.nytimes.com/2013/04/23/business/media/netflix-reports-strong-revenue-on-strength-of-subscribers.html?_r=0

 

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11 thoughts on “Netflix takes on HBO

  1. I agree that companies such as HBO and Showtime are beginning to compete with Netflix with their HBO Go and Showtime Anytime features, but I’m not sure that television is where that competition lies. I have HBO Go and there are over 300 movies available for streaming while Showtime Anytime has over 200. Each of these only have about 10-15 shows available to stream and all the shows are shows from that specific network. Netflix, although it can’t pull from HBO and Showtime, has shows from all other networks, and has over 20,000 TV episodes, so I believe Netflix holds a clear advantage in terms of TV series. However, the movies that are available on HBO Go and Showtime Anytime could present some competition.

  2. It’s not HBO but other companies such as Hulu plus, vimeo, and amazon are trying to eat away at Netflix’s share. Also, additionally the illegal websites streaming the online content can hurt the profits for all these sites. I believe Netflix has an advantage in tv’s because they provide a variety of content without commercials. While Hulu has limited access and commercials every 25 minutes. Amazon is making moves in the rental purchasing business for movies. Each company has their advantages in the market but the free market will decide what company will win out especially when the competition is growing fast from legal and illegal ways to stream content to users.

  3. I personally can’t see Netflix posing as big a threat to HBO as it did to blockbuster. Blockbuster and Netflix provided the same service, Netflix just found a way to do it better. HBO on the other hand offers something unique in its original content. I understand that Netflix has begun to release shows of its own, but it does not have the brand recognition that HBO does for these series. HBO released The Sopranos and The Wire, two of the most critically acclaimed shows ever. Currently Game of Thrones is one of the most popular shows on tv. HBO has become synonymous with excellent programming, and I think it will take several years for Netflix to produce enough series that legitimize it this area.

  4. I am surprised that HBO is a competitor to Netflix because of the difference in content. Yes, HBO has many super popular shows that Netflix cannot have but that is all they have. These inherently different offerings are the basis of my confusion. I agree that Hulu Plus and other illegal sites would appear to be more threatening to Netflix. Why not try to watch things illegally for free if it is a rare occasion that someone gets caught. It is interesting to think of potential ways that Netflix has combated this epidemic. They have a huge selection for so cheap that if you watch movies regularly, then it seems as if there is very little cost. Both HBO and Netflix have a very streamlined set up with their online sites that are both very easy but besides these similarities the content they offer is very different. While Netflix has hundreds of thousands of films, HBO probably only has one or two hundred at a time. This was a very interesting article and posed a question I had never thought of before. Great job! I also loved your use of pictures and the graph. It made it very easy to understand.

  5. I never thought of HBO as a competitors to Netflix. Although Netflix does not have access to the materials that HBO have on HBO To Go, I don’t think that it impacts Netflix. Netflix’s amount of selections is so vast, that not having those specific choices that HBO exclusively has should not effect them. It demonstrated with the fact that Netflix recently surpassed HBO without those selections. I also agree with the post above that television is not the true competitor for these companies, it is movies. With so many selections on each of the three mediums, it is bound to happen.

  6. It actually surprised me how much bigger HBO is than Netflix, and how much bigger HBO was than Stars/Showtime. I always thought Netflix would have the advantage in subscribers until I read this blog. I think it was very smart for Netflix to separate streaming and deliverable discs because many people I know would only use Netflix for streaming and would rarely order movies. This makes Netflix more attractive for customers that only want one of these options and probably contributed to increased members. It will be interesting to see how the original series do and if they impact Netflix’s member number. This was a very interesting article and it was very relevant to what we learned in class. The graph definitely was a plus and helped me understand the material better.

  7. I agree with many of the other comments. HBO and Netflix will probably coexist because they offer different content. Netflix does not have access to HBO shows, but has a wide range of other content. I would not be surprised if someone had an HBO to Go account as well as a Netflix account. That being said, it also does not surprise me that Netflix is growing at a faster rate than any of the other online streaming. I believe that Netflix has a wide range of content that entice a wide range of viewers.
    I think you did a good job with this post. You used visuals well, and included a link to a good article. It was an interesting topic, and related will to class.

  8. I read this post because, especially while at school, Netflix and HBO GO are mainly the only two things I use to watch TV shows. Its interesting to see the change, because we no longer watch television shows on an actual television. Its now done on your computer, ipad, or iphone. I have long time been a loyal HBO GO customer, but only recently have I started watching Netflix. Another article on this topic recently mentioned that Netflix is going to up its security in order to prevent people from sharing accounts and passwords. Currently, both HBO GO and Netflix allow this, but it looks like Netflix has decided to eliminate this capability by upping security and adding its family plan. It will be interesting to see how this plays out. Great post on a very pertinent topic.

  9. Interesting article that relates well to our class in recent weeks. I never knew that HBO had so many more subscribers in recent years than Netflix. Seeing that difference and then hearing that Netflix recently passed HBO in subscribers is insane. That means in the past two and a half years since the end of that graph, Netflix has gained 11 or 12 million users. All of Netflix’s improvements are just making it more and more attractive to customers who want the most out of their subscriptions. The real question in this article should be: Will Netflix ever gain access to HBO shows? i.e. buying out rights or buying out HBO? Time will tell.

  10. Great blog post and a very good topic relevant especially for us college students. Netflix is without a doubt on the rise. However, I definitely would not consider it a fierce battle between HBO and Netflix. Although they are both companies made to broadcast media, they are very different companies. First, HBO is not only available on HBO Go; many watch HBO shows on television’s scheduled broadcasting. Next, HBO is separate from Netflix in that it only allows streaming of it’s original television shows along with several recent Hollywood hits. What makes Netflix so strong is the long tail and the fact that it’s viewers have a broad spectrum of movies and shows to choose from. However, those who watch HBO shows like Game of Thrones will never substitute their current subscription for Netflix simply because Netflix does not have the rights to HBO’s original series. By creating shows like House of Cards, Netflix may appear to be attempting to dominate the original series market as well, but HBO has been known for producing some of the best shows on television. The two companies will definitely coexist with no harm done to one another.

  11. Good post. I never knew that HBO was more popular than Netflix. I think a good number to know would be active HBO Go users compared to Netflix subscribers. Netflix would take years to garner the number of high quality shows as HBO. On the other hand, Netflix has a base of movies and old shows to support its innovation in original content.

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