“Our goal is to become HBO faster than HBO can become us.”
-Netflix Chief Content Officer Ted Sarandos
2013
“The network that we think is likely to be our biggest long-term competitor-for-content is HBO” -Netflix CEO Reed Hastings
2015
Why is Netflix so afraid of HBO?
Because HBO has three things Netflix doesn’t
Massive scale
Massive scaleMassive profits
Massive scaleMassive profits
The best original content
But Netflix can get there
Both HBO and Netflix have similar amounts of domestic
subscribers and revenue
Domestic Subscribers37.7 million
30 million
Domestic Revenue
$3.4 billion
$2.8 billion
But Netflix has a lot of catching up to do on
international subscribers
International Subscribers
16.8 million
65 million
What it lacks in international subscribers, Netflix makes
up for in revenue
International Revenue
$1.3 billion
$600 million
HBO deploys a variety of strategies internationally,
resulting in lower revenue per subscriber1
1HBO’s primary strategy internationally is to license its brand and content. The majority of HBO’s international subscribers are through basic pay-TV subscriptions and some even receive HBO through over-the-air broadcasts.
When it comes to profits, however, HBO has Netflix beat
Total Profits
$260 million
$1.3 billion
Netflix’s profits are dragged down by its
international expansion
U.S. vs Internationalprofit per subscriber per month
USAInternational
$1.17
-$2.10
But even Netflix’s profits in the more mature U.S.
market don’t match HBO’s
Profit Per U.S. Subscriberper month
$1.17
$3.652
2Includes international licensing revenue as well as content licensing revenue