Ten years ago, Ted Sarandos, now co-CEO of Netflix, expressed his desire to surpass HBO. However, today, the focus of both companies is to avoid becoming too similar to each other. Recently, Warner Bros. Discovery decided to remove HBO from the name of its streaming service, Max, to safeguard the prestige of the HBO brand from becoming diluted. Executives at Warner Bros. Discovery believe that HBO’s brand value should not be compromised by adding reality TV programming from Discovery+. They want to protect the “pristine” HBO brand. At an event held on April 12 to present the new Max brand, JB Perrette, head of streaming at Warner Bros. Discovery, said, “HBO is HBO. It needs to stay that way. We will not push it to the breaking point by forcing it to take on the full breadth of this new content proposition had we kept the name in the service brand.” On the same occasion, Casey Bloys, CEO of HBO, pointed out the strength of the Max brand and stated, “We’re not a giant undifferentiated blob of programming.”
Netflix Focuses on Broadening Audience Appeal
Under the ownership of AT&T, WarnerMedia CEO John Stankey believed that HBO could not compete with Netflix on its own because it was too limited in scope. This was the driving force behind making HBO Max. However, Richard Plepler, former chief of HBO, believed that “more is not better. Only better is better.” After merging with Discovery last year, Warner Bros. Discovery CEO David Zaslav still wants to compete with Netflix but not by expanding HBO or its brand. Meanwhile, Netflix aims to appeal to as wide an audience as possible. Although Netflix’s original goal was to become like HBO, it has since shifted its focus to spending more on producing a wide range of programming. Netflix now sees its competitive advantage as its diverse range of content. While HBO has won dozens more major Emmys than Netflix since 2013, Netflix has achieved a higher number of subscribers globally. Netflix now has over 232 million global subscribers. In a recent earnings conference call, Sarandos said, “Everyone has remarkably varied taste that you have to have very different things for different fans, and that’s what we are good at doing at scale.” Netflix’s new strategy is to function as “equal parts HBO and FX and AMC and Lifetime and Bravo and E! and Comedy Central.”
In conclusion, both HBO and Netflix have evolved in different directions over the past decade. While HBO prioritizes protecting its brand, Netflix focuses on broadening its audience appeal by producing a wide variety of programming. Neither company is looking to become the other, and both are content with their current strategies.
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