1-Up on Wall Street: HBO's Good Quarter Pales Next to Netflix

Three Fools take to the air to discuss the brewing fight between these two programmers.

Feb 9, 2014 at 7:30AM

Now that Time Warner (NYSE:TWX) is breaking out financial results for HBO, it's easier to compare the pay-TV network with its main rival: Netflix (NASDAQ:NFLX). How do they stack up?

Host Ellen Bowman puts the question to analysts Nathan Alderman and Tim Beyers in this week's episode of 1-Up on Wall Street, The Motley Fool's Web show in which we talk about the big-money names behind your favorite movies, toys, video games, comics, and more.

Tim says that Warner chief executive Jeff Bewkes' motivation for revealing the details of HBO's business may have come from none other than Netflix's Reed Hastings, who taunted HBO chief Richard Plepler for not being concerned about password sharing at HBO GO, its companion streaming service. The result? We can now confirm that HBO is far more profitable -- $1.68 billion in 2013 versus just $228 million for Netflix.

Yet Nathan says the story isn't that simple. HBO and Netflix produce comparable amounts of revenue, yet the latter is growing far faster. For example, revenue improved 21% last year as the company added 10 million members worldwide and surpassed HBO in terms of U.S. subscribers. Which, for Nathan, means HBO has "some work to do" to keep Netflix at bay.

Now it's your turn to weigh in using the comments box below. How do you handicap the battle between HBO and Netflix? Can there be a clear winner? Please watch the video as Ellen puts Tim and Nathan on the spot, and be sure to check back here often for more 1-Up on Wall Street segments.

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Neither Ellen Bowman nor Nathan Alderman owned shares in any of the companies mentioned in this article at the time of publication. Tim Beyers owned shares of Netflix and Time Warner. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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