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Updated: Game of what? TV viewers ditch HBO as they flock to Netflix

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Update, added on 1/22: The NPD Group retracted part of the data used for this story because it implied that individual subscriber numbers for networks like HBO and Showtime were declining. Instead, NPD is now saying that the aggregate number of households subscribing to these kinds of channels are declining, while some households are subscribing to more premium channels than before, resulting in overall increased subscriber counts. Check here for additional details.

Netflix (S NFLX) has long said that its biggest competitor is HBO, and there is new evidence that it is winning that race, even if you look at the bigger picture and include other HBO-like channels: New numbers from the NPD Group show that the number of households who subscribe to premium TV channels like HBO and Showtime declined by six percent over the last two years. The number of households who subscribe to online video services like Netflix and Hulu Plus grew by four percent during that time period.

Altogether, 32 percent of U.S. households subscribed to premium cable channels in August of 2013, according to the NPD Group. During the same month, 27 percent of households subscribed to online video services. The research company said Monday that Netflix is the biggest premium online video service, but that Hulu Plus and Amazon Prime Instant are seeing some of the biggest growth.

Of course, if you just look compare Netflix’s numbers to HBO’s numbers, then it’s already decided, at least in the U.S.: Netflix had 31 million U.S. subscribers in its 2013 Q3, compared to an estimated 28.7 million for HBO. Internationally, the situation still looks a little different: Worldwide, Netflix now has 40.2 million subscribers, compared to HBO’s 143 million. That’s why, in 2014, Netflix has its eyes set on a significant international expansion.

7 Responses to “Updated: Game of what? TV viewers ditch HBO as they flock to Netflix”

  1. Keith Hawn

    What a thin piece of “analysis.” Would you like to somehow mention
    1) the price differential in each subscription ?
    2) NFLX’s massive marketing investment over the past 3 years
    3) the stagnation in cable uptake the past 3 years (which is the ONLY way to get HBO)


  2. David Higgins

    This isn’t really a valid analysis – all it means is that HBO follows a differentiated business model (higher prices, lower volumes) whereas Netflix follows a low cost provider model (low prices, high volumes). The number of customers a business has says little – in isolation – about which business is performing better.

  3. This is exactly what I was talking about in my comment on your last HBO story. It’s foolish for HBO to wait until they start losing subscribers to move to a streaming-only option. HBO has the streaming infrastructure and the content to compete with and possibly beat Netflix at it’s own game. What’s shocking to me is that they are letting that advantage slowly slip away. By the time they offer a streaming-only option and put all of their resources behind it, they’ll be playing on an even playing field (or worse) with Netflix. It’s crazy.