Netflix Has More Subscribers Than HBO

The digital streaming service has reached an important milestone. More people now pay a monthly fee for Netflix than for HBO.

According to Netflix’s earnings report, 31.1 million Americans pay for access to its content.

To HBO’s great credit, the company has aggressively pushed an excellent digital streaming service of its own, HBO Go, which offers subscribers access to the entire HBO catalog, including every original series and all the movies the channel has agreements to offer. Netflix chief content officer, Ted Sarandos, once remarked, “The goal is to become HBO faster than HBO can become us.”

The problem with HBO Go is that you can get it only if you have HBO, which you can get only if you have cable. This means that while Netflix costs $7.99 a month, HBO Go (including HBO and a basic cable plan) typically costs more than 10 times that amount. And that’s not likely to change, as long as HBO is owned by Time Warner, the nation’s second-largest cable provider. Then again, maybe Time Warner is smarter than that. The parent company’s CEO Jeff Bewkes recently said HBO Go might one day be available as part of a broadband package, so long as subscribers who cut the cable cord for television pay for Internet through a cable or satelite company.

There is tremendous pressure for cable companies and networks to offer more consumer friendly products, and not just because Netflix is winning Emmy awards and increasing its share of the pay TV market. Piracy remains, sadly, the best way for a lot of consumers to get digital versions of TV and movies. According to Piracydata.org and The Verge, people seem to be stealing content they can’t otherwise stream or download.

The aforementioned Netflix and HBO aren’t the only players in digital video. Many companies from a variety of backgrounds are trying their hands at distribution. These include Amazon, Google, Apple, Microsoft and even Target. What sets HBO and Netflix apart is the emphasis on quality, original programming, including “Game of Thrones” (HBO) and “Orange Is the New Black” (Netflix). As far as this blogger is concerned, if competition for our eyeballs has created a market for excellent television, as opposed to the mostly idiotic schlock of the pre-digital era, the more the merrier.

— Posted by Peter Z. Scheer

Full disclosure: I own stock in a number of technology companies, including Netflix and its competitor, Amazon. This presents an obvious conflict of interest and I leave it to the readers to decide whether it has slanted this post. I write about companies in which I’m invested only if I am the only blogger on duty and the news value is relatively high. In such cases, I always disclose my potential bias.