Netflix Surges Ahead of HBO in US Subscribers
With the Chief Executive Officer Reed Hastings at the helm Netflix, evolution from streaming service to a web-based television network is coming to fruition.
The Los Gatos, California based company has reported third quarter results today after the close of the market. September 30, according to Needham & Co., the subscription service reached 30 million paying US subscribers, passing Time Warner Inc, which reportedly has 28.7 million subscribers, as the leading subscription service in the country.
Hastings has taken Netflix to the next level of broadcasting with quality programming, including the Emmy winning the original series “House of Cards” and a vast library of TV shows and films. At $8-a month cable providers are taking notice and plans are in the works to integrate Netflix with traditional programming.
Tony Wible , an analyst at Janney Capital Markets, projects that consumer’s will also come to value Netflix over other more established networks. Wible says, “The low monthly subscription price makes it very challenging for others in the business”
Bloomberg has compiled estimates reflecting US subscriptions and free trials of Netflix will likely reach 31 million in the third quarter, according to the average of eight analysts. That’s an increase of approximately 29.8 million as of June 30.
Instant video streaming is the future of entertainment, lead by the likes of Netflix. Netflix is streamed in more than 40 countries. Netflix offers the ability to stream though internet-capable devices like Smart-TV’s, DVD players, gaming consoles like Playstation, Xbox and Nintendo Wii, tablets, and smart phones according to the Netflix Website.
Netflix CFO David Wells urged HBO to consider offering an online only subscription package at a Goldman Sachs conference this week. Wells believes that if HBO were to consider detaching itself from its current premium cable add-on subscription structure to one where they sell directly to customers, and to offer an online-only service, that even more people would sign up.
“We believe that if they were direct-to-consumer, there would be materially more subscribers that would pay for it in the U.S.,” Wells said.
HBO’s current online offering, HBO Go, is only available to existing cable subscribers of the premium network – those without cable are unable to access HBO-Go. Many users have expressed the wish to take part and to move away from cable and towards online only offerings.
As Netflix becomes more comfortable with owning its shows rather than licensing them, their stock and growth will only rise. Hosting top tier programming, with prominent top tier writers and directors in the lineup, Netflix’s entertainment presence will not be easily ignored. Other broadcasters have surely taken notice.
With shows like The Walking Dead, the Office, and the New Girl as well as its original programming like House of Cards, it comes as no surprise we will be watching the stock of Netflix rise even further in upcoming quarterly reports.
