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Originally Posted by Azure
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I don't know how sustainable Netflix's business model is. I am not sure where their room for growth is. It seems like their licencing costs will only go up, squeezing that profit margin even further. They will soon tap out the market in the US, and growing overseas is their only real growth opportunity. HBOs profitability advantage seems insurmountable since they are not licencing nearly as many 3rd party series and movies. HBO's model will translate just fine if cord cutting really takes off since most people pay a la carte for it anyway, and already most American's can already get HBO without paying for a tv package anyway through their broadband company.
I don't even know that the two companies are competitors, I imagine for most cord cutters, they'd be considered complimentary offerings.
Currently, though, if I was betting on their futures, I would bet on HBO remaining the more profitable company for years to come since they have established themselves as a premium brand that people are willing to pay more for content that costs them less.