Netflix passes HBO in original programs

Associated Press

SAN FRANCISCO

Look out, HBO. Last year, Netflix produced more original programming than cable’s premium-network leader, according to numbers from both companies. The Internet video service isn’t slowing down either, even if means risking subscribers with price increases needed to help pay for more exclusive TV shows and movies.

Since its push into exclusive shows kicked off in earnest with the 2013 debut of “House of Cards,” Net- flix has hit the fast-forward button. Last year, it put out 450 hours of original programming, compared with 401 from Time Warner’s HBO. This year, both companies say they expect to release roughly 600 hours of original material.

HBO, of course, is the network Netflix CEO Reed Hastings set out to emulate when his service began charting a course away from streaming TV reruns and previously released movies. Ted Sarandos, the company’s head of programming, famously told GQ back in 2013 that Netflix’s goal was “to become HBO faster than HBO can become us.”

Netflix is aiming to put itself into “an entirely different and supreme league” from its rivals, says Tom Numan, a former TV network and studio executive who now lectures at UCLA’s graduate school of theater, film and television. In effect, he says, the company is aiming to become the first global network for original shows and movies.

Amazon.com, Hulu and other services are scrambling to catch up with their own moves into original programming. Its own original slate is only a quarter the size of Netflix’s, but Amazon.com can boast that its shows won more Emmy awards last year than its rival.

Netflix is counting on a vast library of original programming to help keep subscribers on board as it meets new competition. Amazon, for instance, just started offering its streaming-video service for $8.99 a month.

Amazon is undercutting Netflix’s $10 monthly price for its most-popular video-streaming plan, as is Hulu, which charges $8. HBO charges $15 per month for a video-streaming service it launched last year to compete against Netflix.

Original programming doesn’t come cheap. The Los Gatos, Calif., company ended last year with $10.9 billion committed to Internet streaming rights, nearly doubling from $5.6 billion at the end of 2012. Netflix hasn’t disclosed how much of that spending has gone toward original series and exclusive movies, but the percentage has been steadily increasing.

The cost of licensing and overseas expansion has whittled Netflix’s profit margins. In its first-quarter results, released late Monday, the company said it earned $28 million, or 6 cents per share, on revenue of nearly $2 billion. Investors, though, are far more focused the company’s subscriber growth.