Andrew Wallenstein, Variety:
Netflix reported 29.17 million domestic subscribers in the first quarter of 2013, surpassing HBO for the first time.
Netflix, which ended 2012 with 27.15 million domestic subs, added just over 2 million subs, according to first quarter results issued Monday.
HBO ended 2012 with 28.7 million subscribers, according to data from SNL Kagan.
Having overtaken HBO's subscriber statistics and exceeded Wall Street's revenue expectations, Netflix ($NFLX) opened to an enormous 24% gain this morning.
Long-term readers will know I'm extremely confident regarding Netflix and its growth opportunities. For newer readers, here's an (updated) summary as to why I feel quite so passionate:
Netflix has a huge head start — both in terms of mindshare and tangible products — in original programming and content partnerships. They have pre-emptive deals with the likes of Disney to become active for the company's ever-increasing media library and Reed Hastings has — despite one ridiculous summer of failure — proven to be a shrewd businessman.
The fundamental fact of the matter is that Netflix is simply not going anywhere and any attitudes to the contrary are utterly out-of-step with the realities of the marketplace.
Of course Amazon — including LoveFilm abroad — and HBO pose threats to Netflix's dominance. But, in a digital media landscape increasingly hinging on original programming, no outlets are performing to the advanced degree of Netflix in the digital space.
Perhaps you didn't enjoy House of Cards and maybe (bafflingly) you're not excited about Arrested Development, but you're unquestionably aware of both. Meanwhile, Amazon released pilots for its original shows this week and barely caused a ripple of coverage online. HBO meanwhile continues to draw the ire of fans who cannot legally watch Game of Thrones.
Netflix is a volatile stock, but that should not be misconstrued as evidence of a failing company. For as long as HBO continues to avoid a digital-only offering, Netflix will reign supreme. And, at this point, HBO appears to be the only viable competitor. As much as I have a deep-seated affinity for Amazon, the experiential quality of their streaming program pales in comparison to both Netflix and HBO.
Even if (when?) HBO chooses to provide a digital offering, I do not foresee a crippling effect on Netflix's growth. Instead, I think it'd catalyze a consumer-benefiting competition for producing the best streaming solution. And that's certainly not a bad thing for any of us.
On-demand digital programming is the future. And original programming will have to exist within that environment. Simply put, the only company truly succeeding and acting aggressively upon this reality is Netflix. And I cannot help but think it'll benefit them in the long-run.
Nevertheless, HBO will invariably be watching Netflix's performance with a keen eye today. If that were to force their hand, I'd be the last person to complain.