Netflix, Inc. (NASDAQ:NFLX) may be a relative newcomer to the video content creation scene, but that hasn’t stopped people from comparing it to the much longer established cable TV channel HBO. Netflix is probably enjoying the attention, but as the latest numbers show, HBO doesn’t really have anything to fear from Netflix—at least not yet, according to The New York Times.
Netflix meets HBO: round one
One of the reasons many are starting to compare Netflix, Inc. (NASDAQ:NFLX) with HBO is because of how quickly the former has managed to rack up subscribers. However, in terms of achievements, it has a long way to go. Netflix just received its first Golden Globe for its original series House of Cards. The company has also received three Emmys. HBO, on the other hand, has racked up 463 Emmys in its many years of business.
The subscription business model also suggests some resemblances between Netflix, Inc. (NASDAQ:NFLX) and HBO. In this area, Netflix trumps HBO, as the company reported 33.4 million U.S. subscribers recently, which is five million more than what HBO has.
Netflix, HBO ratchet up content creation
Interestingly enough, HBO decided to break out its operating income for the very first time this month, and its income dwarfs that of Netflix, Inc. (NASDAQ:NFLX). HBO reported $1.8 billion in operating profits during 2013, while Netflix reported just $228 million.
Because of the rivalry—whether real or not—both companies have increased their spending on programming and technology. As a result, producers seem to be taking more financial and creative risks, thus increasing the quality of the content being offered to both companies.
Why Wall Street loves Netflix
DreamWorks Animation SKG CEO and co-founder Jeffrey Katzenberg told The New York Times that the idea of a rivalry between Netflix, Inc. (NASDAQ:NFLX) and HBO is just an invention of the media. He also said that one of the reasons people have been so excited about Netflix is the fact that the company has done what many viewed as the impossible in terms of subscriber numbers in just a handful of years.
In addition, the executive said that people seem to think that since Netflix is gaining, HBO must be losing, but he said this isn’t the case. He said HBO is also rising.