Netflix Has More Subscribers, But HBO Remains More Profitable

Netflix, which recently reached 50 million streaming customers, now generates more revenue from subscriptions ($1.146 billion) than HBO. According to Netflix CEO Reed Hastings, edging past HBO’s $1.141 billion is a “minor milestone.” SNL Kagan estimates that HBO has 28.7 million U.S. subscribers. However, HBO remains much more profitable than Netflix. In related news, Time Warner Chairman Jeff Bewkes told analysts this week he is open to OTT services.

netflix6“They still kick our ass in profits and Emmy’s, but we are making progress,” Hastings wrote on his Facebook page. “HBO rocks, and we are honored to be in the same league.”

HBO exceeded all other networks this year in Emmy nominations with 99 (Netflix received 31).

“Netflix, with its original series ‘House of Cards’ and ‘Orange Is the New Black,’ continues to grow faster than HBO, which is only available to people with a pay-TV subscription,” reports Mashable.

“HBO’s owner, Time Warner, reported that the network produced $548 million in operating profit and $1.42 billion in revenue during the three-month period ended June 30. By comparison, in that same period, Netflix reported $129.6 million in operating income and $1.43 billion in sales.”

However, any comparisons between the two come with a number of caveats.

“HBO is a TV channel that also has an on-demand service, and is known primarily for its high-quality original shows; Netflix is an on-demand streaming service (with a declining DVD rentals arm), whose own original shows are a growing but still small part of its business,” explains Quartz.

“HBO is still way more profitable. It made $548 million last quarter for its corporate parent Time Warner, compared to Netflix’s $71 million in profit. HBO also generates additional revenue from licensing its popular shows, and that portion of its business has been growing.”

Bewkes told analysts on Wednesday that Time Warner is open to OTT video service providers, as long as a deal would be “additive” to current distribution relationships.

“Bewkes said that he was ‘interested’ in Dish Network’s plan for a streaming service that would be targeted at young millennials, and he added that while he was not opposed to OTT in general, any deal would have to be positive for Time Warner,” reports Multichannel News.

“We’re certainly open to opportunities to grow our business,” he said. “We’re not philosophically opposed to an over-the-top virtual MVPD model, we just have to believe it will be additive to the whole situation rather than subtractive.”