When it comes to creating compelling content for television, there may not be a better team in the business than the one working at Time Warner's (NYSE:TWX) HBO unit. With many high profile series already under its belt including The Sopranos, The Wire, and Deadwood, the team still finds ways to improve.

HBO's recently released show True Detective officially became the premiere cable network's most watched freshman series ever, beating out even the immensely popular fantasy epic Game of Thrones.  With the proven ability to consistently put out original and compelling content, HBO should remain Time Warner's most valuable assets going forward.

Hbo

Source: Time Warner 

A true hit
Make no mistake about it; True Detective was a hit for HBO. Throughout it's eight-episode run, which began on Jan. 12 and ended March 9, the series drew in an impressive 11.9 million viewers per episode on average. 

This number, which factors in delayed viewership, represents the highest average viewing audience of any first year HBO show. True Detective managed to beat the network's previous record holder Six Feet Under, which averaged 11.4 million viewers per episode in 2001. 

Perhaps most impressive is that the show even beat the first season of Game of Thrones. This bodes well for True Detective considering that Game of Thrones has only increased its ratings since season one, showing the true power of a consistently high-quality series.

The season four premiere of Game of Thrones drew in an impressive 6.6 million viewers, which swells to 8.2 million viewers when replays are factored in. This is a big improvement over season three's premiere, which drew in 4.4 million viewers initially. Also, the audience for season four's premiere was HBO's largest since The Sopranos finale in 2007. All signs point to Game of Thrones overtaking The Sopranos in average viewer per episode this year. 

By comparison, True Detective drew in 2.3 million viewers in its first live showing in January. Since the series bested Game of Thrones' first season opening total of 2.2 million viewers,  it again highlights just how much room there is for the new show to grow. 

Digital growth
Another highlight for HBO is its growing online audience. The unit's HBO Go platform, which allows subscribers to watch most of the network's hit shows and movies on mobile devices and streaming equipment, crashed during the season four premiere of Game of Thrones. The company credited the "fatal error" message subscribers saw to overwhelming demand for the epic series. 

The platform has been so successful Time Warner has reportedly  considered a separate HBO Go service, which would be independent of its cable television operations. This would put HBO Go in direct competition with streaming companies like Netflix (NASDAQ:NFLX)

This may be just what Time Warner needs to get its growth back on track. Currently, analysts expect the company to experience a 7.6% decline in sales and only a 4.2% increase in earnings for fiscal 2014. When compared to Netflix's expected blistering growth in 2014, including a 22.9% increase in revenue and a 121.6% increase in EPS, the move would make a lot of sense for Time Warner. 

Currently, investors are not being asked to pay up for Time Warner's potential growth in streaming. Time Warner trades at a cheap forward P/E of 14.3 while Netflix trades at a more expensive forward P/E of 45.5. 

Not only would it provide Time Warner with additional streams of revenue and foster sales growth, it would be an effective use of HBO's large library of previously aired content. Time Warner would have an edge up on Netflix should it enter the streaming arena. Although Netflix has been working hard on content creation of its own for some time now and has had success with hit shows like House of Cards, the company's lineup of original content is nowhere near the level of HBO's.

This has not stopped Netflix from trying, however. The company continues to invest in new content and could have as many 10 original shows for viewers in 2014, including second seasons of Hemlock Grove and Orange is the New Black as well as a new series from renowned directors the Wachowski siblings entitled Sense8

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(Source: Time Warner)


Bottom line
The network's advertising slogan "It's Not TV, It's HBO" is a perfect summation of its success. HBO has remained at the top of television simply by being consistently better than all other television competitors with regard to new content creation.

The current success of shows like True Detective and Game of Thrones indicates that management at HBO is still capable of winning over audiences. If Time Warner ever decides to enter the arena of stand-alone online streaming with HBO Go, competitors like Netflix will have a dangerous new competitor.

With slowing growth and increasing competition, I believe it is only a matter of time before Time Warner offers HBO Go as a stand-alone feature. This means that investors should consider Time Warner at its current cheap valuation levels for possible growth in streaming down the road.

Philip Saglimbeni has no position in any stocks mentioned. 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 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.