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HBO Hates Netflix (And You Should Too)

  • Plus, these big legacy companies need lots of cash to subsidize loser divisions such as publishing, local news and radio (things you still count on) and to keep paying out rising dividends and buying back billions' worth of stock (things investors want).
  • Maybe you only watch a handful of the dozens of options cable and satellite provide, but that's no different than paying $100 for a concert ticket to sit through opening acts you've never heard of.
  • On the large scale, cord-cutting will never take off. It's that simple. Consumers can complain all they want, but there's not going to be a day anytime soon when you can access premium content -- and that might end up being live sports and only live sports -- at Netflix prices. It's just not going to happen.
  • If you cut the cord today and wanted access to the NFL, MLB and NBA seasons, along with first-run movies and televisions series, you would end up spending as much per month, if not more than you do now. Until the old guard colludes and kills Netflix, you're not going to have a one-stop shop to stream everything. That could have been Hulu, but the dream died long before the company's CEO, Jason Kilar, resigned.
  • So, listen, it's awesome that Netflix costs $8 a month. I love it. In fact, I would gladly pay double for the present offering. But, Netflix can never be anything other than a supplementary service. If you want everything you want you'll need to pay for it. Simple as that.
  • Whether you agree with me or not -- and it's cool if you don't as I can certainly see the counterpoints -- set aside your emotion. Think like an investor. Look at the performance of the three stocks -- NFLX, TWX and CMCSA.
NFLX Chart NFLX data by YCharts

Add DIS to the mix. Add News Corp (NWSA - Get Report). Both also outperformed NFLX over the last year.

Sanity, logical thought, rationality -- for once, it made more than a cameo appearance on the stock market. It prevailed.

Like it or not, the old guard media companies operate from positions of strength. Even Disney -- the company's horrible Netflix mistake notwithstanding -- holds the cards. The company had reasons for making that deal. Probably good ones. I just don't agree. Ultimately, it's the major players who call the shots.

Expect more deals like the HBO/Universal one. Expect fewer of the Netflix/Disney type. Because it operates from a position of strength, the old guard media dictates the pace of change vis-a-vis what you stream, from which platform and how much you have to pay for the privilege.

--Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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CMCSA $61.23 0.77%
DIS $104.37 1.10%
NFLX $93.15 3.50%
NWSA $12.61 1.50%
TWX $75.32 0.24%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

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