How HBO and Netflix drifted apart


Ten years ago, so-netflix chief content officer – and now co-CEO – Ted Sarandos told GQ“The goal is to become HBO faster than HBO can become us.”

But, to quote HBO’s “The Wire,” “The thing about the good old days: it’s the good old days.”

Today, the apparent goal of the two companies is to avoid becoming each other.

The last two weeks have crystallized the divergent priorities of the media giants. Head quarter Discovery of Warner Bros. decided to drop HBO from the name of its flagship streaming service Max to prevent the HBO brand from becoming… Netflix. Rather than risk diluting HBO’s prestige brand with tons of reality TV programming from Discovery+, Warner executives want HBO to stay pristine.

“HBO is HBO. It has to stay that way,” said JB Perrette, head of streaming at Warner Bros. Discovery, at an April 12 event unveiling the new Max brand. “We won’t be pushing it to breaking point by forcing it to take on the full scope of this new content proposition if we had kept the name in the service mark.”

In a not-so-subtle take on Netflix, HBO CEO Casey Bloys bragged about Max, emphasizing the strength of his brand.

“We are not a giant undifferentiated mass of programming,” he said at the event.

Protecting HBO, rather than expanding it, hasn’t always been the priority. Under AT&T ownership, John Stankey, then CEO of WarnerMedia (and now CEO of AT&T), seemed comfortable leaning on the HBO brand to challenge Netflix. It was the driving force behind the creation of HBO Max – combining HBO’s programming with other original content and programming from the WarnerMedia catalog library. Stankey thought HBO couldn’t compete with Netflix on its own because its reach was too limited.

AT&T CEO John Stankey speaks at the Boston College Chief Executives Club luncheon in Boston, Massachusetts on March 24, 2023.

Brian Snyder | Reuters

“We need hours a day”, Stankey said to an internal town hall in 2018 after AT&T completed its acquisition of Time Warner, the parent company of HBO. “It’s not hours a week, or hours a month. We need hours a day. You’re competing with devices that are in people’s hands and grabbing their attention every 15 minutes.”

That sentiment didn’t sit well with HBO chief Richard Plepler, who would leave the company just months after mayor. Plepler’s mantra, which he often repeated, was: “More is not better. Only better is better.”

AT&T would merge WarnerMedia with Discovery in a deal completed last year. The CEO of Warner Bros. Discovery’s David Zaslav will always pursue Netflix, but he won’t do it by expanding HBO or its brand.

Netflix’s change from HBO

But over the years, Netflix’s ambitions have grown. Investors encouraged more spending. Just buying prestige shows felt like small potatoes. HBO’s US audience was typically around 35 million subscribers, and Netflix quickly overtook that by creating a global streaming service whose focus became the entire traditional pay-TV ecosystem rather than simply HBO.

Netflix said this week it ended the first quarter with more than 232 million subscribers worldwide.

But the importance of making prestige shows to compete with HBO seems to be less and less essential to Netflix with each year. It’s also fair to say that Netflix hasn’t had the same success rate as HBO when it comes to creating prestige TV shows. Since 2013, HBO has won dozens more major Emmys than Netflix.

Ted Sarandos attends the 94th Academy Awards at the Dolby Theater in Hollywood, California on March 27, 2022.

Angela Weiss | AFP | Getty Images

“When we talk about our content, it sometimes feels like a laundry list,” Sarandos said this week on Netflix’s earnings conference call. “Everyone has remarkably varied tastes, you have to have very different things for different fans, and that’s what we do well on a large scale.”

Netflix has decided that its competitive advantage is the breadth of its programming. Sarandos said The New Yorker earlier this year that Netflix’s new strategy is to operate as “equal parts HBO and FX and AMC and Lifetime and Bravo and E! and Comedy Central”.

Ten years after Sarandos quoted GQ, it’s clear that HBO won’t become Netflix, and Netflix won’t become HBO. And it suits them both well.

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