When you're on top, you can afford to be picky. And so it is with Netflix. The streaming movie service now has about 500,000 more U.S. subscribers than HBO. In this week's quarterly letter to shareholders, Netflix outlined the changes it is making to insulate itself from competitors — and they're not much different from HBO's strategy.
Netflix in fact seems to be following the same path as HBO, which started as a service that delivered other studios' movies and then became a creator of original content. Netflix now plans to create more original shows, such as its recent "House of Cards," which attracted 1 million new subscribers, the company said.
Next up is its original fourth season of cult favorite "Arrested Development." This summer subscribers will see "Orange Is the New Black," a prison dramedy from Weeds creator Jenji Kohan, and in 2014, "Sense8," a new Sci-Fi thriller from the Wachowski siblings.
Pick and choose
So you'll see a few more original shows, but you'll also see less from some studios. "By dealing directly with the producers of TV shows, we are better positioned to pick just those shows that we believe will work best," Netflix said. It also said it's a way to get around the restrictions that cable companies like to impose, such as showing just one episode a week. Netflix prefers releasing shows all at once, as it did with "House of Cards," and let viewers set their own pace.
Netflix also wants exclusives. And without them, the company is willing to say goodbye to Viacom Networks and its access to Nickelodeon, BET and MTV content.
Netfllix said it's not too worried about competitors such as Amazon On Demand and Hulu Plus , but it is worried about HBO Go.
Although, HBO's online and mobile service, HBO Go, remains tied to a cable subscription, the channel has hinted that HBO Go could become a stand-alone service some day. And that's why Netflix is adopting HBO's programming strategies. If both services are around $8 a month, the question could indeed become a variation of: What do you prefer, "Game of Thrones" or "Arrested Development"?
And if you wanted both, it might only be $16 — a lot cheaper than today's cable.
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