HBO delivered a figurative slap this week to its growing competitor Netflix. The premium cable network has apparently cut Netflix off from discounted DVDs, forcing the company to look elsewhere for supply.
According to the New York Times, HBO stopped providing DVDs to Netflix on January 1. HBO is, of course, the network behind hits such as “The Sopranos”, “True Blood” and “Boardwalk Empire”. As Netflix takes advantage of volume discounts through wholesale venues to provide DVDs and Blu-ray to customers, the NYT believes that Netflix will most likely be relegated to retail for HBO series’.
The online video rental service seems unfazed by the slap. In a statement about HBO pulling out, a Netflix spokesman said, “Netflix will continue to provide HBO titles on DVD and Blu-ray to our members.”
Since the move seems unlikely to be a noteworthy financial hit to the rental service, why bother? Perhaps its a gesture to let Hastings know that HBO acknowledges the competition, and sees Hastings plan to nip at its heels. HBO has already dried waters on the streaming front by refusing Netflix the rights to stream HBO series’ or films. That right is reserved for HBO’s own online streaming video site, HBO Go, which directly competes with Netflix for the streaming market. Hastings pointed out that HBO was becoming “more Netflix-like.”
Meanwhile, Hastings outlined his strategy last year to fix the Netflix business model. The company wants to work towards buying exclusive streaming rights, and plans on producing original content. On the original programming front, we’ve heard talk about a program directed by David Fincher named “House of Cards” set to debut later on in the year; however, “Lilyhammer” will be the first Netflix original series, which is set for a streaming debut on February 6 in the US, Canada and Latin America.
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