How HBO and Netflix have drifted aside

A decade ago, back then-Netflix Chief content officer — and now co-CEO — Ted Sarandos told GQ, “The goal is to get HBO faster than HBO can get us.”

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

Today, the obvious goal of both companies is not to become one another.

The past two weeks have revealed the different priorities of the media giants. parent company Warner Bros. Discovery decided to drop HBO from the name of its flagship streaming service, Max, to protect the HBO brand from becoming… Netflix. Rather than risk diluting HBO’s prestige brand with oodles of Discovery+ reality TV programming, Warner executives want HBO to remain 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 to unveil the new Max brand. “We’re not going to push it to the breaking point by forcing it to adopt the full breadth of this new content offering if we had kept the name in the service brand.”

In a not-so-subtle shot on Netflix, HBO CEO Casey Bloys touted Max by highlighting his brand strength.

“We’re not a huge, undifferentiated lump of programs,” he said at the event.

Protecting HBO rather than expanding it wasn’t always the priority. Under AT&T’s ownership, then-WarnerMedia CEO (and now AT&T CEO) John Stankey seemed comfortable leaning on the HBO brand to challenge Netflix. This was the driving force behind the development of HBO Max – the combination of the HBO programs with other original content and library programs from the WarnerMedia catalogue. Stankey believed HBO couldn’t go it alone against Netflix because it was too limited.

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

Brian Snyder | Reuters

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

That sentiment didn’t sit well with HBO CEO Richard Plepler, who would leave the company just months after City Hall. 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 transaction completed last year. Warner Bros. Discovery CEO David Zaslav will continue to follow Netflix, but he won’t do so by expanding HBO or its brand.

Netflix’s switch from HBO

Meanwhile, Netflix seems clearly focused on providing content that reaches the widest possible audience. This is far from becoming HBO, which was Netflix’s goal in and around 2013. Back then, Netflix was just starting to look at original content, bidding against HBO for shows like the Kevin Spacey-led drama House of Cards. When Netflix struck again with drama Orange Is the New Black, it seemed Sarandos was on track to make Netflix the new HBO.

But over the years, Netflix’s ambitions grew. Investors cheered more spending. Just buying prestige shows seemed like small potatoes. HBO’s U.S. audience was typically around 35 million subscribers, and Netflix quickly broke that mark as it built a global streaming service that targeted the entire traditional pay-TV ecosystem, not just HBO.

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

But the importance of making prestige shows to compete with HBO seems less important to Netflix every year. It’s also fair to argue that Netflix hasn’t had the same hit rate as HBO when it comes to making prestige TV shows. Since 2013, HBO has won dozens of bigger Emmys than Netflix.

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

Angela Weiss | AFP | Getty Images

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

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

Ten years after Sarandos was quoted to GQ, it’s clear that HBO isn’t becoming Netflix and Netflix isn’t becoming HBO. And that’s fine with both of them.

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