HBO is branching out from the traditional cable and satellite package models by launching a stand-alone online service in 2015. One of the fastest-growing units of Time Warner, HBO will offer the service to compete with popular digital services like Netflix.
How does Netflix feel about the competition? Calling HBO's stand-alone service "inevitable" and "sensible,"Netlfix's CEO says both services have the ability to prosper.
"Starting back in 2011 we started saying that HBO would be our primary long-term competitor, particularly for content," Netflix CEO Reed Hastings writes. "The competition will drive us both to be better."
HBO added over two million subscribers this year so far, earning $4.9 billion in revenue last year. Netflix released its third quarter earning today, revealing that it gained an additional 3 million subscribers, 37.6 million short from its third quarter expectations.
With a total amount of 53.1 million customers, Hastings expects that the company will close the year with 57 million members globally. "This quarter we over-forecasted membership growth," he says.
"Many people will subscribe to both Netflix and HBO since we have different shows, so we think it is likely we both prosper as consumers move to Internet TV," he adds.
While both services may continue to grow, after its third quarter results, Netflix's shares were down 20 percent.
