Netflix now has more subscription revenue than HBO

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Netflix CEO Reed Hastings humble-bragged on Facebook today:

Reed Hastings on Facebook

He’s right. (About the financials, at least—Silicon Valley, an HBO sitcom about tech startups, was really bad.) Here’s how HBO’s subscription revenue compares to Netflix’s revenue from subscriptions to its streaming video service:


That reflects Netflix’s rapid subscriber growth in recent years. Over the same period, HBO subscribers have been roughly flat in the United States, with modest gains in other countries.

Now for the caveats. First, the comparison to HBO is not exactly apples-to-apples: 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.

Then, as Hastings notes, 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. It had $274 million in content revenue last quarter, boosted by a deal to license old HBO shows to Netflix’s streaming rival Amazon. That’s small compared to $1.14 billion in HBO subscription revenue, but still significant.

But it’s the ambition to be more like HBO that prompts Netflix to constantly draw the parallel. Netflix has repeatedly called HBO its top competitor. Ted Sarandos, the head of content at Netflix, said in 2013, “The goal is to become HBO faster than HBO can become us.” Hastings last year joked that HBO CEO Richard Plepler’s password for HBO Go, the network’s streaming service, was “Netflix bitch.”

HBO doesn’t welcome the comparisons. Time Warner executives feel that investors undervalue HBO, compared to Netflix. And as a content company, HBO is far ahead, which Hastings alluded to with his comment about Emmy awards.

More coverage of Time Warner’s earnings