Shipping out those episodes of "The Wire" and "Game of Thrones" just got hairier for Netflix.
HBO is refusing to provide the subscription service with Blu-rays and DVDs of its programs, TheWrap has confirmed. The red-envelope company can still buy discs from third-party distributors, thanks to the First Sale doctrine which allows companies to resell pre-recorded discs.
However, Netflix won't get them at a discount after a distribution agreement with the cable company terminated at the end of 2011, and now will not be renewed. "Netflix will continue to provide HBO titles on DVD and Blu-ray to our members," Steve Swasey, a spokesperson for Netflix, told TheWrap.
It's an open secret that many premium cable channels are no fans of Netflix, seeing the company's streaming service as a threat to their subscriber bases. Having launched its own streaming service, HBO Go, nearly two years ago, the company wants to limit access to its content, according to an individual with knowledge of the negotiations.
Unlike Showtime and Starz, HBO has never allowed any of its programs to be streamed on Netflix, and not renewing the deal with Netflix can be seen as part of an ongoing effort to to safeguard the value of its content.
Further exacerbating the competition, Netflix has recently gone into original programming, producing series such as the upcoming Kevin Spacey political thriller "House of Cards" and new episodes of the cult hit "Arrested Development."
Netflix CEO Reed Hastings acknowledged the rivalry during a speech at the UBS Media Conference last month.
"The competitor we fear the most is HBO Go," Hastings said. "They aren't competing directly with us now, but they can. HBO is becoming much more Netflix-like, and we're becoming much more HBO-like."
Being more HBO-like just made the battle for all those home entertainment dollars more expensive for Netflix.