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Netflix now bigger than HBO

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Re: Netflix now bigger than HBO

#61

Post by filmgirlcw »

MatthewPhillips wrote: post #56
chatmasta wrote: post #54

Earlier quoted context omitted.

But what's stopping Netflix from replicating this success? To what extent is the success of HBO purely a function of the capital they invest? i.e. what non-financial assets does HBO provide that contribute to the success of its shows? What does HBO bring to the table that Netflix can't?

HBO is already a premium brand, Netflix is not. Although nothing is stopping from Netflix from becoming one, getting over that hump is not easy.

Excellent point - I was going to add brand to my above reply but didn't in the interest of time (and because I'd probably attribute brand to experience).

HBO has a quality seal of approval that has taken 15 years to cultivate. That can't be bought or earned overnight from one show. HBO consistently gets more Emmy nominations than every other network -- once Netflix is able to counter in that area, then it will happen.

Still, getting over the hump can happen. Look at AMC. Before Mad Men and The Walking Dead, they were best known for the terrible original series Remember WENN (don't ask, it sucked and I was in 7th grade when it premiered). Now it's easily one of the best networks on TV. Same for FX. Justified, Always Sunny, Sons of Anarchy, Archer, The Americans are all fantastic and this was a brand that was best-known for playing Fox reruns until about 7 years ago.

Re: Netflix now bigger than HBO

#62

Post by sneak »

tnuc wrote: post #55
arjn wrote: post #8

Earlier quoted context omitted.

Yeah, House of Cards with Spacey is excellent. I started and liked it so much I finished watching all episodes in 2 days. Its really good to see companies like HBO and Netflix giving the traditional TV media houses a run for their money. BTW, if you liked House of Cards, check out Game of Thrones.

>... if you liked House of Cards, check out Game of Thrones. Is there anyone on hn who hasn't checked out Game of thrones?

I don't like the genre (fantasy), and I don't like soaps. "OMG, $x is fucking $y!" isn't my idea of entertainment unless $x and $y are people I know personally.

Re: Netflix now bigger than HBO

#63

Post by chatmasta »

MatthewPhillips wrote: post #56
chatmasta wrote: post #54

Earlier quoted context omitted.

But what's stopping Netflix from replicating this success? To what extent is the success of HBO purely a function of the capital they invest? i.e. what non-financial assets does HBO provide that contribute to the success of its shows? What does HBO bring to the table that Netflix can't?

HBO is already a premium brand, Netflix is not. Although nothing is stopping from Netflix from becoming one, getting over that hump is not easy.

Is "a premium brand" a main obstacle preventing new entrants into the content production market? There is another large obstacle: acquiring subscribers to fund the production. Netflix already has a massive subscriber base. HBO needs to convince people to subscribe to their content and to watch their content. Netflix already convinced a massive subscriber base to subscribe to its content. Now all it needs to do is convince them to watch it.

EDIT: I think my post addresses filmgirlcw's point well. Yes, it took 15 years for HBO to cultivate their seal of approval. But that is partially because cultivating a seal of approval required HBO to build its subscription base, which takes time. Netflix already has its subscription base, so it only needs to convince that subscription base to watch its content. It can do that by 1) advertising prominently within Netflix (near zero cost), and 2) producing quality content, so that once people watch the first episode of a Netflix show, they want to watch the second. Therefore, the highest cost to Netflix is that of producing quality content. But as long as they can do that, they will succeed because they already have the audience. Of course, they do need to recognize that they only have a small window of opportunity to show that they can, in fact, produce quality content -- or else they will lose the willingness of their subscriber base to watch their originals.

Re: Netflix now bigger than HBO

#64

Post by cwp »

sneak wrote: post #62
tnuc wrote: post #55

Earlier quoted context omitted.

>... if you liked House of Cards, check out Game of Thrones. Is there anyone on hn who hasn't checked out Game of thrones?

I don't like the genre (fantasy), and I don't like soaps. "OMG, $x is fucking $y!" isn't my idea of entertainment unless $x and $y are people I know personally.

Ok... But have you checked it out?

Re: Netflix now bigger than HBO

#66

Post by mpyne »

tnuc wrote: post #55
arjn wrote: post #8

Earlier quoted context omitted.

Yeah, House of Cards with Spacey is excellent. I started and liked it so much I finished watching all episodes in 2 days. Its really good to see companies like HBO and Netflix giving the traditional TV media houses a run for their money. BTW, if you liked House of Cards, check out Game of Thrones.

>... if you liked House of Cards, check out Game of Thrones. Is there anyone on hn who hasn't checked out Game of thrones?

/me raises hand.

I also haven't read the books.

Re: Netflix now bigger than HBO

#67

Post by jebblue »

filmgirlcw wrote: post #45
colkassad wrote: post #4

I just finished watching the first season of House of Cards and I really enjoyed it. It's up there with original HBO programming as far as quality is concerned. If they can keep that up then traditional outlets should definitely stay worried. I know there was some talk about Netflix's future because of their dependence on content providers, but if they can keep this up then they certainly have a hand to play.

That becomes the question. The problem is that their current production slate indicates that they maybe have one -- maybe two -- standout shows to do a year. HBO typically has 4 (right now that would be Game of Thrones, Girls, Boardwalk Empire and True Blood with The Newsroom being an easy slot for #5). Right now, Netflix's original programming track record is really spotty aside from House of Cards -- which is absol…

Netflix just needs movies, we haven't watched HBO since the 80s'. Their programming was never why we watched anyway. It's all about the movies. If I want original programming, and we do, we watch the education channels, in HD, free OTA.

Re: Netflix now bigger than HBO

#69

Post by mbell »

jebblue wrote: post #67
filmgirlcw wrote: post #45

Earlier quoted context omitted.

That becomes the question. The problem is that their current production slate indicates that they maybe have one -- maybe two -- standout shows to do a year. HBO typically has 4 (right now that would be Game of Thrones, Girls, Boardwalk Empire and True Blood with The Newsroom being an easy slot for #5). Right now, Netflix's original programming track record is really spotty aside from House of Cards -- which is absol…

Netflix just needs movies, we haven't watched HBO since the 80s'. Their programming was never why we watched anyway. It's all about the movies. If I want original programming, and we do, we watch the education channels, in HD, free OTA.

As a counter point, I honestly see 'movies' somewhat dying out. Shows like Game of Thrones, House of Cards and several others now have the same production quality as movies and aren't hamstrung by the same limitations. e.g. how do you tell a deep story in 2 hours?

Re: Netflix now bigger than HBO

#70

Post by dangrossman »

CamperBob2 wrote: post #60
lotso wrote: post #26

Earlier quoted context omitted.

> HBO actively refuses to even think about an Internet-only subscriber model. And you know this how? I'm pretty sure the execs at HBO have run the numbers. Why HBO Can't Afford To Offer A Stand-Alone Streaming Service http://www.forbes.com/sites/erikkain/2012/05/11/why-hbo-cant...

I know it because I actually read the article you linked to. Funny, Netflix seems to 'afford' it just fine.

If HBO were to go internet-only, it'd lose the major cable operators heavily promoting them for free. They only market premium channels so hard because it helps sell expensive cable TV service. HBO would lose subscribers immediately as operators no longer actively replace subscribers for them as others churn out.

To make up for the lost stream of customer acquisition, they'd have to:

a) Cut prices by more than 50% to become competitive with Netflix/Hulu. This will cost them billions a year.

b) Increase their catalog size significantly, which would cost billions a year.

To give you an idea of the costs of licensing, HBO's last major deal was with Universal studios and cost them over $2 billion for access to their future movie catalog.

It's hard to come up with a scenario where cutting their exclusive tie with cable makes sense financially right now. It's not "bullheaded" to say "no, we shouldn't throw away $10+bn/year to give Bob his internet subscription while we're in the midst of a death battle for the future of digital entertainment distribution".

Netflix can do it because (a) they have a big catalog and low prices to entice subscribers with, (b) they got much of their catalog on the cheap before studios fully understood its value; this perk is going away as licenses renew, (c) it has no choice. Whether Netflix can grow its original content business within the constraints of its low subscription price faster than its licensing costs get out of hand is still up in the air.

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