HBO (s TWX) has big plans to make its online on-demand video service available to more cable providers and on more devices, including the Apple (s AAPL) iPad. But one place you won’t see HBO movies and TV shows is on Netflix (s NFLX), according to a Bloomberg interview with HBO co-president Eric Kessler.
Netflix recently announced a deal with premium cable network Epix that will bring 3,000 new titles to its Watch Instantly streaming service, including newer blockbusters such as Iron Man and Star Trek as well as a wide range of catalog content from Paramount (s VIA), MGM and Lionsgate (s LGF). The subscription video company also struck a deal with Relativity Media for exclusive streaming rights to feature films it distributes. And of course, Netflix has a long-running deal with Starz for 2,500 streaming titles from its library.
But while Netflix has made big moves to add content to its streaming video library, including new releases from other cable networks, HBO remains committed to its cable partners. Cable has been good to HBO; according to Bloomberg, the network pulled has 29 million subscribers across all its pay TV partners, and pulled in $3.9 billion in sales last year.
“There is value in exclusivity,” Kessler said in the Bloomberg interview, going on to say that consumers “are willing to pay a premium for high quality, exclusive content.”
As a result, it plans to cater to those consumers by making its HBO Go online video service more readily available. The service, which offers subscribers an additional 800 hours of on-demand content online, is currently available through Comcast (s CMCSA) and Verizon FiOS (s VZ), but HBO plans to make it available to all major cable providers over the next six months. It also plans to make that content available on more devices, such as the iPad.
But HBO’s focus on traditional cable partners will mean it’s unlikely that Netflix subscribers will be able to stream shows like True Blood, The Wire or even The Sopranos through its Watch Instantly service anytime soon. Netflix subscribers will also be missing out on streaming titles from Warner Bros., 20th Century Fox (s NWS) and Universal Pictures that HBO owns the rights to.
As Netflix becomes more like a cable company, HBO’s stance might be a little short-sighted. By the end of the second quarter, Netflix had 15 million subscribers to its service, 61 percent of which used the streaming service. That means that it already rivals some of the big cable companies in terms of viewership. And Netflix has shown that it is willing to right big checks for streaming content, reportedly paying up to $1 billion over five years over its deal with Epix. Netflix might not have the same heft as some of the big cable companies yet, but it’s certainly growing, and for HBO to not take advantage of it as an additional distribution channel could be a missed opportunity in the long run.
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