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Netflix edges out HBO in quarterly subscription revenue for first time

Earlier this week, Netflix CEO and founder Reed Hastings announced via Facebook that the streaming service passed HBO in quarterly subscriber revenue. Netflix didn’t edge the veteran premium cable network by much ($1.146 billion vs. $1.141 billion) and, as Hastings himself notes in his post, there are myriad other factors at play when comparing the two services’ financial success. The news does, however, provide further evidence that Netflix is a growing force to be reckoned with.

Hastings managed to remain humble in his Facebook post, explaining that HBO “still kick[s] our ass in profits and Emmy’s, but we are making progress. HBO rocks, and we are honored to be in the same league.” Netflix was nominated for 31 Emmys this year, more than double the 14 it received in 2013 (Netflix was the first-ever Web-based service to be nominated for its original programming). HBO, on the other hand, garnered an impressive 99 nominations, easily putting it at the top of the field. According to coverage by Quartz, HBO netted $548 million in overall profits last quarter while Netflix brought down a puny-by-comparison $71 million.

What makes this duel so interesting are the similarities and differences between the Netflix and HBO, and how the two services are transforming over time.

As VentureBeat noted in its coverage of Hastings’ announcement, Netflix is the darling of the over-the-top (OTT) industry and web-based video content providers, while HBO sits at the top of the pay-TV realm – after all, “It’s not TV, It’s HBO.” But these two services have begun to resemble each other more and more as Netflix continues to crank out solid original programming and HBO looks to provide viewers with more online outlets for its content, headlined by its wildly popular HBO GO app.

Netflix has a number of projects slated for the near future, including a stand-up/docu-comedy/talk show with Chelsea Handler, an original show featuring Marvel’s Daredevil, and an upcoming fifth season of Arrested Development. And on the other side of the coin, HBO has been cultivating its streaming app for the possibility of a solely broadband-delivered subscription model ready for whenever the public decides to stop tolerating cable. The service also pumped a fat bundle of classic content (including The Sopranos, The Wire, and Six Feet Under) into Amazon’s Prime Instant Video service back in May.

As leaders of their distinctive packs, both Netflix and HBO are blurring the lines in order to innovate and grow. As the video industry continues its awkward evolution into the next era, the two services are learning from each other, and looking more and more alike with each passing month . Score this round for Netflix.

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