NFLX – Netflix Exec Says HBO Go Is Ineffective

by Carla Lake | September 26, 2013 12:20 pm

Netflix NFLX   Netflix Exec Says HBO Go Is Ineffective[1]Netflix (NFLX[2]), Hulu, HBO Go. All are streaming video services that have their own original content – but while NFLX has established itself as an internet giant and Hulu has followed Netflix strategies in this, HBO Go still doesn’t offer a subscription model independent of cable TV.

That’s why a NFLX exec recently said HBO Go is missing out – and basically challenged the rival to go head-to-head with Netflix stock.

So why would Netflix CFO David Wells invite competition by urging HBO, which is owned by Time Warner (TWX[3]), to adopt a subscription model[4]? After all, NFLX stock is already 41 years behind when it comes to award-winning content. And shouldn’t Netflix be keeping that kind of strategy from a competitor?

The answer is simple: Wells believes there are enough customers to go around for both NFLX and HBO Go to thrive.

“…we believe that if they [HBO] were direct to consumer with similar sort of device penetration, ubiquity, freedom, and control, there would be materially subscribers that would pay for that in the U.S.,” said Wells in the Goldman Sachs (GS[5]) Communacopia conference[6] this week.

Is NFLX Better than HBO Go?

I’m part of that potential audience. I would love to cut the cord since I watch everything streaming with Apple (AAPL[7]) gadget Apple TV anyway.

But I’ve kept cable because there’s no other way to get my fix for the flapper dresses and bootlegging badassery of Boardwalk Empire. Content is king, and to get that content, I’ll go through whatever means are the least expensive and most convenient – Apple, Netflix or otherwise.

HBO has maintained[8] that a subscription model is not a priority at this time. So for now, NFLX stock has the upper hand, and is starting to show its original content can compete with HBO’s more-established shows.

This week Netflix made history as the first online content provider to win Emmy awards[9] with its original show House of Cards. Planned new original series from Netflix include Marco Polo, Narcos and Sense8. Original content partnerships with well-established companies[10] like Disney (DIS[11]) are also in the works.

As for NFLX stock, Netflix has seen a 237% gain YTD and is red-hot right now.

So investors shouldn’t worry too much about NFLX giving trade secrets away to HBO Go.

As of this writing, Carla Lake did not hold a position in any of the aforementioned securities.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/11/Netflix.jpg
  2. NFLX: http://studio-5.financialcontent.com/investplace/quote?Symbol=NFLX
  3. TWX: http://studio-5.financialcontent.com/investplace/quote?Symbol=TWX
  4. adopt a subscription model: http://consumerist.com/2013/09/25/netflix-cfo-urges-hbo-to-offer-online-subscription-service/
  5. GS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GS
  6. Communacopia conference: http://seekingalpha.com/article/1713912-netflixs-management-presents-at-22nd-annual-goldman-sachs-communacopia-conference-transcript?part=single
  7. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  8. has maintained: http://gigaom.com/2013/02/12/hbo-go-airplay/
  9. the first online content provider to win Emmy awards: http://online.wsj.com/article/SB10001424052702303759604579092061505560526.html
  10. with well-established companies: http://investorplace.com/2013/09/disney-considers-creating-original-content-for-netflix-amazon/
  11. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS

Source URL: http://investorplace.com/2013/09/nflx-show-nflx-stock/
Short URL: http://invstplc.com/1nvkfkN