This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

HBO Hates Netflix (And You Should Too)

NEW YORK ( TheStreet) -- I first saw the story over at TechCrunch: Time Warner's (TWX - Get Report) Home Box Office signed a deal with Universal Pictures, a division of Comcast (CMCSA - Get Report), to keep the latter's films on the former's air through 2022.

Simply put, if you want access to roughly half of Hollywood's top releases -- after they leave the theater -- you'll need to subscribe to HBO through a cable or satellite company unless, someday, Time Warner offers HBO GO a la carte.

There's no question -- HBO and TWX execs were trading high-fives after this deal. While Netflix (NFLX - Get Report) is more of a pest -- a veritable ankle-biter -- than a true threat, I know they enjoy knocking Reed Hastings around.

The comments that followed TechCrunch's story show a misunderstanding of the media business -- "old" and "new" -- as well as a sense of entitlement enabled, in part, by the illusion that Netflix operates from a position of strength.

The overarching reaction: Consumers lose. And, ultimately, because they're not "listening" to "what consumers want," HBO, Universal and others like them will lose. Wrong. That's where the misunderstanding and self-entitlement comes in.

Despite the cat calls, Time Warner, led by Jeff Bewkes, is not the dinosaur it's made out to be. They're just smart business people who control a considerable amount of premium content.

Let's run through reality from a consumer and investor standpoint.
  • You should hate Netflix because it has created a myth. By charging $8 a month for unlimited viewing and somehow signing an exclusive movie deal with Disney (DIS - Get Report), they have lured the consumer into thinking content is cheap, that somehow we're entitled to everything we want to watch for a low price -- something closer to 10 bucks a month than the $50 to $100-plus most of us pay for cable or satellite.
  • Reality is as follows: Content is expensive because it costs a lot of money to make and, ultimately, the market -- to some extent, you -- sets the price. Advertisers pay big bucks to get on big-time shows and events, why shouldn't we do the same?
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CMCSA $60.76 -0.64%
DIS $103.26 -0.74%
NWSA $12.42 -0.96%
NFLX $90.03 -0.28%
TWX $75.14 -2.10%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs