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Netflix in Hong Kong

Netflix overtakes HBO and Amazon in the production of exclusive content

The global provider of streaming movies and TV series is counting on a vast library of original programming to help keep subscribers on board as it faces tougher competition

PUBLISHED : Thursday, 28 April, 2016, 10:02pm
UPDATED : Thursday, 28 April, 2016, 10:01pm

Look out, HBO. Netflix produced more original programming than cable’s premium-network leader last year, according to numbers provided by the two rivals. The internet video service isn’t slowing down, either, even if it risks losing subscribers to price increases that will help pay for more exclusive shows.

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

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HBO, of course, is what the network Netflix chief executive Reed Hastings set out to emulate when his service began charting a course away from streaming TV reruns and previously released movies.

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Netflix is aiming to put itself into “an entirely different and supreme league” from its rivals, says Tom Nunan, a former TV network and studio executive who now lectures at UCLA’s School of Theatre, Film and Television. The company’s goal, he says, is to become the first global network for original shows and movies.

With Netflix now available in 190 countries, Hastings expects Netflix to surpass 100 million subscribers next year.

Amazon.com, Hulu and other services are scrambling to catch up with their own moves into original programming. Although its own original slate is only a quarter the size of Netflix’s, 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 faces tougher competition.

Amazon, for instance, just started offering its streaming-video service for US$9 a month; previously, you had to sign up for the company’s US$100-a-year Prime service, which includes free shipping from its e-commerce site and other goodies.

Netflix will test the loyalty of its long-time subscribers next month when it starts to raise prices by 25 per cent, following a two-year freeze that kept rates at US$8 per month. The increase will hit 17 million to 22 million US subscribers, based on analyst estimates.

Original programming doesn’t come cheap. The company ended March with US$12.3 billion committed to internet streaming rights, nearly double the US$5.6 billion it spent at the end of 2012. Netflix hasn’t disclosed how much of that spending has gone towards original series and exclusive movies, but the percentage has been steadily increasing.

But original content also appears to be a major draw for many subscribers. In a recent online survey of 2,500 adults in the US conducted by Morgan Stanley, 45 per cent cited it as a reason to subscribe to Netflix.

HBO, however, still has a huge advantage over Netflix in terms of prestige. Last year, HBO won 43 Emmys, more than any other TV network, while Netflix’s original programmes garnered just four – one fewer than Amazon.com.

Associated Press