Netflix posted its quarterly earnings this afternoon and the numbers were pretty solid.
One interesting tidbit contained in the company’s letter to shareholders is how it views its feted rival HBO, the Time Warner-owned premium channel, which recently launched its own streaming-TV product, pitting the two brands directly against each other for the first time.
As we have said in the past, Netflix and HBO are not substitutes for one another given differing content. We think both will continue to be successful in the marketplace, as illustrated by the fact that HBO has continued to grow globally and domestically as we have rapidly grown over the past 5 years.
This is a change from what Netflix has said in the past. Back in 2013, Ted Sarandos, who is in charge of Netflix’s content, famously declared: “The goal is to become HBO before HBO can become us.” And on a conference call last year, CEO Reed Hastings joked that Richard Plepler, his counterpart at HBO, was Netflix’s “bitch.”
In the letter today, though, Netflix sounded rather unconcerned about the potential threat posed by HBO. It’s similarly unworried about the impact of new internet TV services from Dish, Sony, and potentially Apple, because Netflix, the company says, “is lower cost, has exclusive and original content, and is not focused on live television.”
Netflix also did away with a reference from a previous letter to shareholders regarding Popcorn Time, the “Netflix for piracy” that is becoming very popular in many places. (The company did, however, describe piracy as a “considerable long-term threat, mostly outside the US.”)
It may sound like Netflix has its head in the sand. But in fairness, after another crushing quarter, Netflix has every reason to be confident.