Netflix Inc. is the uncrowned king of the television industry and this industry is a harsh mistress. A company that knows so much about television is HBO itself, which has been in business for more than 30 years. Previously, it dominated as the king of all new cable and internet TV players. Regardless of where it stands now, no original program producer can make a show as big as HBO Game of Thrones. Until then, Netflix was not in the equation. It was a new ‘ingénue’ which everyone wanted to be associated with.
As the company started to make its impact in the market, its share price was soaring and was heavily investing in brining excellent quality content as well as launching new hit shows. From the first day, it started becoming a streaming TV powerhouse. The streaming company has achieved the basics required to lead the market, and it is now only working to keep going stronger. On the other hand, HBO announced to copy strategies of Netflix to compete against it.
It is a well-known fact that the Hollywood industry is mostly driven by ratings whether it is about online movies or TV series. When it comes to HBO and its competitors, the main difference is the disclosure of its success. Despite prevailing in the market for long, Netflix tries not to reveal any viewership information or ratings about its movies and shows. This also includes actors, directors, and producers that are featuring in them.
This is not the case with HBO. It lives and dies by the ratings, which are the most important factor for the Hollywood industry. The premium cable and satellite firm recently invested a big amount in a show, Vinyl, which received underwhelming comments from the critics. This way, the streaming service provider is a star company, which is spending billions on new dramas and movies whereas HBO showed its vulnerability by spending more than a $100 million on a flop show.
Ever since HBO first aired Game of Thrones, it worked quite hard for a big hit. Game of Thrones first premiered in 2011 and almost five years have passed. HBO currently is accountable for 30% of the operating profits at Time Warner and since it is struggling to hold on to its cable subscriber numbers due to companies like Netflix, the pressure is rising to produce hit shows. Since last summer, the shares of Time Warner declined by 25%.
HBO is not doing well in the streaming domain as well. Netflix has hit the 75 million streaming subscribers’ mark last month but the new and anticipated streaming service, HBO Now, managed to sign up only 800,000 subscribers so far. Netflix further strengthened its market lead by expanding in 130 countries simultaneously in January.