HBO Still Not Moving Off Cable

Richard Lawler of Engadget on how well HBO is actually doing compared to Netflix::

The real difference right now is in how much money each keeps in profits after costs for things like original content (House of Cards and Game of Thrones aren’t made for free) are accounted for. HBO’s operating profit in Q4 is $414 million, and $1.7 billion for the year, but Netflix’s Q4 profit came in at $82 million, and for its efforts it made $228 million all year. According to Variety, Time Warner CEO Jeff Bewkes said on the earnings call that HBO and Cinemax added about 2 million customers last year, while Netflix grew by 6 million, and added more than 2 million customers just in Q4.

People badly want HBO to go rogue and offer their services without a cable subscription, and each year some journalist talks about how HBO has to do it soon or wither and die. Of course, people say the same kind of things about Apple over and over again. And each year both companies keep rolling in profits.

HBO keeps churning out good programming. Sure Newsroom wasn’t as big as people thought it would, and Boardwalk Empire is coming to a close. But Game of Thrones is one of the most popular shows on TV. True Detective has turned into a big hit during it’s first season. Girls is going strong, and there are other good shows in the works. People keep buying their DVDs and ordering their channel so that they can watch all of the quality programming they put out. Unless the cable companies make a radical shift, it doesn’t seem like HBO is withering. In fact, they are thriving. As good as other networks keep getting, I can’t see giving up HBO anytime soon.

So I will say again, what I have said many times before. HBO is not getting decoupled from cable packages anytime soon. Accept that, and plan accordingly.