Internet Video

Sorry, Netflix: Still No HBO For You

7/25/2012 9:32 AM Eastern

Despite Netflix executives raising the specter that the Internet streaming service might cut a licensing deal with HBO, the premium programmer reiterated that it's not interested in playing ball.

"We are not in discussions and have no plans to work with Netflix," HBO senior vice president of corporate affairs Jeff Cusson said.

In a letter to shareholders Tuesday, Netflix CEO Reed Hastings and CFO David Wells praised HBO's TV Everywhere strategy, writing that the network "continue[s] to do great work with HBO Go, which is now available to most U.S. households that subscribe to the premium service."

"While we compete for content and viewing time with HBO, it is also possible we will find opportunities to work together -- just as we do with other networks," the Netflix execs said. "Consumers who are passionate about movies and TV shows are quite willing to subscribe to multiple services."

Hastings, on a call with investors Tuesday, elaborated on the comments and noted that they were hypothetical.

"My point is that we're just another network, and that when you have multiple networks, they often find ways of working together," Hastings said. "So it's a general point that it's not a zero-sum game between HBO and Netflix. And that, in fact, there may be ways of working together. But there's nothing particularly pressing."

HBO has consistently said it will stick with its current distribution model through pay-TV partners, nixing the idea of licensing originals to streaming services like Netflix or offering consumers direct access to HBO Go.

Meanwhile, Starz Entertainment let its content-licensing deal with Netflix lapse in February 2012, and Showtime Networks pulled content including original series Dexter and Californication from the streaming service last year.

Netflix currently has an exclusive window for movies from Epix, the joint venture of Viacom's Paramount Pictures, Metro-Goldwyn-Mayer and Lionsgate. However, Netflix's online exclusivity "expires shortly," Hastings and Wells said, while its agreement to carry Epix content non-exclusively runs through mid-2013.

In the current quarter, Netflix expects NBCUniversal's coverage of the 2012 London Olympic Games to have a "negative impact" on viewing and subscriber acquisition.

Netflix gained 530,000 streaming subscribers in the U.S. in the second quarter to stand at 23.9 million and added another 560,000 internationally -- but the company's growth rates were well below its Q1 results, and Netflix shares fell on the weaker outlook for the second half of 2012.

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