HBO is more profitable than Netflix even though domestic subscribers lag
Online piracy may be raging and Netflix continues to build up a loyal user base, but Time Warner CEO Jeff Bewkes says HBO saw its most significant domestic subscriber growth in 17 years.
The premium channel behind “Game of Thrones” and “Girls” added 2 million subscribers to its rolls in 2013, giving it 28.5 million U.S. subscribers. Combined with sister channel Cinemax, subscriber numbers are over 43 million stateside and 130 million worldwide.
Netflix has 44 million subscribers globally, 29.9 million of them coming from the domestic pool. Despite Netflix's U.S. subscriber advantage, Bewkes stressed to investors on a quarterly earnings call Wednesday that video streaming sites are additive.
“Netflix is higher in HBO homes, HBO viewing is higher in Netflix homes,” Bewkes said. “We don't see any effect on subscribers or pricing.”
He added, “HBO is in a league of its own.”
It's also more profitable than Netflix. For the first time, Time Warner pulled back the curtain on HBO's financials, breaking out its revenues and operating income. In 2013, the channel's revenues grew 4 percent to $4.9 billion, while operating income climbed 16 percent to $1.8 billion. In contrast, Netflix had $4.4 billion in revenue, a 22 percent jump from the previous year, and net income of $228.3 million, a major increase from the $49.9 million the company reported in 2012.
Bewkes said that HBO will launch five new shows this year, including “Beavis & Butt-Head” creator Mike Judge's “Silcon Valley” and “Lost” guru Damon Lindelof's “The Leftovers,” the latter of which he predicted could be its next big hit.