Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Netflix now bigger than HBO

qz.com

Post reply on HN
Print view View original

91–100 of 143 posts

Re: Netflix now bigger than HBO

#91

Post by gamblor956 »

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.

HBO makes a profit of hundreds of millions on revenues of http://ir.timewarner.com/phoenix.zhtml?c=70972&p=irol-ne...], while Netflix's annualized profits are expected to be roughly $15-20 million on estimated revenues of $3.6 billion.

HBO could quite literally suspend operations for the next decade and it would still be vastly more profitable than Netflix, especially now that Netflix has begun incurring massive content production/acquisition costs (see e.g., http://www.marketwatch.com/investing/stock/nflx/financials and the massive drop in Netflix's net income after its sweetheart content deals with Starz and other media companies expired).

Re: Netflix now bigger than HBO

#92

Post by CamperBob2 »

jacques_chester wrote: post #86
CamperBob2 wrote: post #80

Earlier quoted context omitted.

HBO would lose subscribers immediately as operators no longer actively replace subscribers for them as others churn out. But that's going to happen -- and is happening -- anyway. "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". "What? A phone that plays music?! Are you crazy? Do you realize…

This is a poor analogy. The net profit on an iPhone is higher than the net profit on an iPod.

And the net profit on a diamond necklace is higher than either. I'm not sure what point you're making.

Apple didn't build the iPhone because it was profitable. They built it because they knew that a race was about to begin, in which second place was really going to suck. HBO is faced with the same reality, whether they believe it or not.

Re: Netflix now bigger than HBO

#93

Post by filmgirlcw »

cyanbane wrote: post #20

"HBO’s figure dates to the end of 2012, but it’s unlikely to have grown much in the first three months of 2013, owing as much to the cable TV industry’s stagnation as its own trouble signing up new subscribers." I wonder how many people are like me and only pay for the months in which Game of Thrones is on (Q2 so far)?

LOTS. That's why they typically try to program hits like GoT and True Blood back to back so they can get you for six months.

HBO hovers between 27 and 33m depending on the quarter.

Re: Netflix now bigger than HBO

#94

Post by filmgirlcw »

chatmasta wrote: post #63
MatthewPhillips wrote: post #56

Earlier quoted context omitted.

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 con…

But Netflix has to retain that audience. As we saw with the price hike, people by the millions will drop their subs and fast. TV is a hits based business -- HBO has to deal with that too, post Sopranos and SATC, it struggled for a few years to find the hits.

I'm also not sure if you understand that HBO has has subscribers in the tens of millions for decades. That's my point, they've cultivated this premium brand but have been a part of many customers lives for years. I'm 30 and I've never NOT had HBO.

My parents have had HBO literally since 1972. 41 years. I realize that's an extreme example but the network has a strong brand.

HBO and Netflix aren't in a zero sum game; both can succeed. It's just that as Netflix moves into HBO's pool, it's going to have to face the issues HBO already faxed, whereas HBO won't have as hard of a time shifting to over the top once the business model makes sense.

Re: Netflix now bigger than HBO

#96

Post by jacques_chester »

CamperBob2 wrote: post #92
jacques_chester wrote: post #86

Earlier quoted context omitted.

This is a poor analogy. The net profit on an iPhone is higher than the net profit on an iPod.

And the net profit on a diamond necklace is higher than either. I'm not sure what point you're making. Apple didn't build the iPhone because it was profitable. They built it because they knew that a race was about to begin, in which second place was really going to suck. HBO is faced with the same reality, whether they believe it or not.

The point I'm making is that by introducing the iPhone, Apple didn't lose out by cannibalising iPod sales.

Whereas if HBO changes models, it will cannibalise the existing business model at a net loss to the business overall.

So the analogy with Apple's introduction of the iPhone is not relevant.

Re: Netflix now bigger than HBO

#97

Post by k4st »

This is not so much constructive, but more a comment on my Netflix viewing habits and opinions on three shows which they've created:

I really enjoyed House of Cards. Lilyhammer was pleasantly surprising and I'm looking forward to future seasons. I recently tried watching Hemlock Grove and that was awful. I'm sceptical of Arrested Development: I loved the original, but it's been a long time and I feel like it's time to move on.

Otherwise, I find Netflix to be attractive in cycles. Every now and then, I will discover a bunch of new things (be it movies or TV shows) and binge watch them, and then I feel like there nothing left on Netflix. I keep paying on "down periods" because I like there is a sense of security because I have a high quality / stable streaming service available to me. Then, after a few weeks, I eventually return to Netflix for more binge viewing.

Re: Netflix now bigger than HBO

#98

Post by ericclemmons »

david927 wrote: post #90
cwp wrote: post #64

Earlier quoted context omitted.

Ok... But have you checked it out?

I watched the first episode and honestly didn't find it interesting.

I'm with you. The language didn't seem fitting, and if I remember correctly, it was a bit incestuous.

Re: Netflix now bigger than HBO

#99

Post by jimbobimbo »

mbell wrote: post #69
jebblue wrote: post #67

Earlier quoted context omitted.

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?

There're plenty of movies that manage to tell deep stories in 1.5 hours. Netflix is a treasure trove when it comes to quality entertainment.

Re: Netflix now bigger than HBO

#100

Post by kevinconroy »

filmgirlcw wrote: post #53
thezilch wrote: post #50

Earlier quoted context omitted.

I'm pretty sure people consistently pay $8/mon, despite the original content. You literally need only stay out of my way, be easy to use on multiple devices, and only entertain me 2-4hrs/mon to keep me coming back.

No, by consistently I mean without churn. See, what happens with Netflix, HBO, Showtime -- even regular cable -- is that subscriber churn happens. It's often cyclical. One of the reasons HBO staggers its release schedule for its programming is to try to get people to pay year-round (it's also why they introduced HBO Go -- in essence they gave up their home video revenue, or greatly limited it -- in exchange for keepi…

Even originally programming won't stop churn entirely.

The originally programming is meant to pull in new subs and keep current subs engaged at higher levels so that they are less likely to churn. If you want to cancel your subscription for whatever reason already, it may not matter if they have 100 original series, you'll still cancel.

It's all about increasing the lifetime value of each subscriber. One way is to keep them longer (e.g. reduce churn). The other is to upsell them to higher pricing tiers. We're not seeing that with the original content (yet), but what if Netflix managed to (for sake of discussion) get the rights to Firefly and made another season of it but only for people who signed up for a new "Premium Streaming" package. You'd see some complaints, but a slew of "Shut up and take my money" memes. I don't know if they'll ever do this, but it's the next logical step once they've established the original content as desirable.

Post reply on HN