Reed Hastings Taunts HBO

It's a good thing that Netflix (Nasdaq: NFLX  ) CEO Reed Hastings is a Facebook (Nasdaq: FB  ) board member.  He certainly has a way of giving the leading social networking website free publicity with some of his Facebook status update postings.

"Excited to see HBO join us in offering standalone streaming service in Scandinavia," he posted on Facebook on Thursday afternoon. "What about the USA? We thought the first match-up would be in Albania."

On the surface, it seems like a legitimate pat on the back, and not as headline worthy as his revelation on Facebook last month that Netflix was now streaming a billion hours of video a month.

Time Warner's (NYSE: TWX  ) HBO -- in a Stockholm press conference on Thursday -- revealed that it would launch as a standalone streaming service in Sweden, Norway, Finland, and Denmark by mid-October.

Is it merely a coincidence that these are the same four countries where Netflix plans to roll out its popular streaming service later this year?

That's not really what's important here, though.

This is actually the first time that HBO is being made available without forcing watchers into paying for a costly cable or satellite television subscription.

Hastings can't be genuinely pleased that he will be facing HBO as a streaming competitor in Scandinavia, but he also realizes what it would mean if Time Warner allows HBO to roll out as a standalone service elsewhere.

The pay TV industry is at a tipping point in this country. Cable networks and broadcasters continue to demand outrageous carriage fees that cable providers merely pass on to consumers. If anyone in this country wants to see HBO hits Game of Thrones or Newsroom, legally, they first have to shell out for at least a costly basic cable plan. If Hastings can somehow egg Time Warner on to begin offering HBO Go as a standalone service domestically, either the pay TV industry will tumble like an avalanche of Jenga pieces, or cable and satellite television providers will turn to Netflix as a premium service alternative that they can offer customers.

It's a brilliant move by Hastings.

The Albania comment was a more direct shot.

It refers back to when Time Warner CEO Jeff Bewkes compared Netflix's threat to the pay TV industry to the "Albanian army going to take over the world" two years ago.

Well played, Hastings.

The war's afoot.

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The Motley Fool owns shares of Facebook and Netflix. Motley Fool newsletter services have recommended buying shares of Facebook and Netflix. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz has been a Netflix subscriber and shareholder since 2002. He does not own shares in any of the other stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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