Time Warner's HBO service flexed its content muscles in the second quarter, helping the company log record network revenue. Overall sales grew by 10% to $7.4 billion and earnings jumped by 46%. Profits from the network's business, which includes HBO and Turner networks like TNT and TBS, were $1.3 billion, or better than 80% of the company's total operating income.
Here are some of HBO's wins that powered its contribution to that monster result:
- Shows: Game of Thrones boosted its audience for the third season by 20%. At 14.2 million viewers per episode, that success follows only The Sopranos on HBO's list of its most popular shows ever.
- Movies: HBO's original film Behind the Candelabra was a hit, becoming the network's most watched movie in a decade.
- Buzz: HBO garnered 108 Emmy nominations, leading all networks for the 13th year running. Also celebrating some Emmy love were the HBO series Girls and VEEP.
Now seems like a good time to check Netflix's progress against what its chief content officer, Ted Sarandos, said back in February, that "the goal is to become HBO faster than HBO can become us."
Catch me if you can
Shows: Netflix is off to a good start on original programming. The streamer doesn't release viewership figures, but has said that each of its successive original series launches notched higher viewing than the ones before. Sure, current ratings are probably nowhere near HBO's, but that should change with time. If and when shows like House of Cards and Hemlock Grove reach third and fourth seasons, they'll have some serious viewership momentum behind them.
Movies: Netflix isn't dabbling in the feature film business, at least not yet. But it is expanding beyond shows into original documentaries and stand-up comedy specials. HBO can attest that those types of content are quite valuable for brand building.
Buzz: Netflix's 14 total Emmy nominations nearly equal what HBO achieved on just one title, the film Behind the Candelabra. Game of Thrones tacked on an additional 16 nods for the network, and another HBO film, Phil Spector, added 11 more to push HBO's total nominations to more than 100. Netflix clearly isn't in the same league yet, even if it did make history by grabbing the first-ever nominations for online-only programming.
You remind me of myself
And HBO is even looking more like Netflix these days. Time Warner made its HBO Go app available on the AppleTV platform last quarter, meaning that subscribers using that box can watch HBO's programs just as easily as they can stream Netflix's.
So, to sum up: HBO raised the bar on content quality while attracting online streaming fans at the same time. Your move, Netflix.
Fool contributor Demitrios Kalogeropoulos owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.