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Netflix vs. HBO: Do More Subscribers Choose Streaming Service Over Cable TV?

By Melanie Ehrenkranz on October 21, 2013 2:22 PM EDT 0

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This is a Netflix vs. HBO comparison. With more paid U.S. subscribers in Q3 2013, the popular streaming service proves a viable rival to HBO. (Photo: Netflix)

Netflix may be less established than HBO, but the popular streaming service is proving itself a worthy rival for the cable network giant. While Netflix still has some ground to cover ahead of its potential TV takeover, recent reports reveal that it is trumping HBO in paid U.S. subscribers. Combined with its highly successful Emmy-nominated original series and future partnership with cable channels, Netflix is a force to be reckoned with. However, will CEO Reed Hastings be able to transform the streaming service enough to outdo longstanding cable networks? Let's look at a Netflix vs. HBO comparison.

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Netflix vs. HBO Subscribers

Netflix just reported its Q3 results after markets close, Bloomberg reports. As of September 30, the world's largest subscription-video service reached approximately 30 million paying U.S. customers. HBO, Time Warner Inc.'s premium cable-TV network, reached approximately 28.7 million paying U.S. customers. This means that of the third-quarter of 2013, Netflix passes HBO in terms of paid U.S. subscribers. This represents a huge shift in viewing habits. Based on these numbers, it is evident that more viewers are paying to watch television and movies on personal devices and gaming consoles, rather than through purchase of a cable package on a television set. While tablets and consoles may be more portable, it's likely not the reason more people are turning to subscription services over cable packages. It is evident through the countless Emmy nominations that Netflix CEO Hastings is roping in audiences with exceedingly popular original content.

Netflix vs. HBO Original Content

Netflix made headlines this year for landing numerous 2013 Emmy nominations. In fact, its original TV series "House of Cards" took home awards for casting and cinematography. It didn't raise eyebrows for raking in the most awards, though. HBO still swooped in with wins in the more major categories, such as Lead Actor in a Drama Series (Jeff Daniels "The Newsroom") and Lead Actress in a Comedy Series (Julia Louis-Dreyfus "Veep"), to name a few. As Fool.com's Tim Beyers points out, the major cable networks still dominate major Emmy wins, but services like Netflix and Amazon.com are about to disrupt the status quo. This can be tied to the original content. "House of Cards," "Orange is the New Black" and the future to-be-titled show from the creators of "Damages" all pose a threat to cable television viewership. This isn't to say HBO hasn't proven it can produce successful original content. Here's to looking at you, "The Sopranos" and "Game of Thrones." The nominations and paid subscriber peak just prove Netflix may be following in cable TV's fruitful footsteps, only through a pioneering viewing model.

Netflix vs. HBO Price & Content

Following the 2-13 Emmy nominations, many reports surfaced claiming Netflix is the new HBO. However, HBO is still inking new deals with major motion pictures to compete with the likes of Netflix in terms of content options. For example, the major cable network signed an exclusive contract with Universal Pictures this year that prevents Netflix from streaming Universal movies for another decade. Ouch. Though it seems both HBO and Netflix are taking cues from one another in the battle for subscribers. HBO offers HBO Go, its own online streaming service. The difference here lies in costs. For viewers not wanting to pay the price for both cable AND video streaming will want to look elsewhere. With HBO Go, customers have to pay for the cable package in order to subscribe to the online service. Netflix, on the other hand, has one fixed fee a month, averaging at the lean price of $8. The latest Netflix news, though, is that the CEO Reed Hastings has met with some of the chief cable companies to discuss plans to launch a TV service. Sources reveal that the Netflix TV service would come through set-top boxes, possibly adding an extra cost to a viewer's bill. All of these changes mark the ever-changing way viewers are watching TV and movies. Clearly, Netflix is paving the way, following closely behind the time-honored HBO. Which service do you think will be more successful in ten years, Netflix or HBO

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