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Netflix Is Chasing HBO, but It's Already Passed Plenty of Big Cable Guys

Showtime, Scripps and AMC are in the rear-view mirror.

Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Netflix makes no bones about the fact that it wants to be HBO. And it is closing in on the pay channel, at least in terms of revenue: Last year, Netflix’s streaming business generated $3.5 billion, while HBO made $4.9 billion from subscription fees.

But while it chases Time Warner’s pay channel, Netflix has already passed lots of other big cable operations. MoffetNathanson’s Michael Nathanson spelled it out in a research note this morning — Netflix has already climbed past AMC Networks, Starz, CBS’s Showtime and Scripps Networks. Next up, Discovery:

Remember that we’re talking about revenue here, not profits: HBO generated operating income of $1.8 billion last year, compared to Netflix’s $228 million.

On the flip side, remember that except for HBO, Showtime and Starz, the rest of the cable networks are dependent on the bundle — people pay for them, more or less, whether they want to or not. Netflix, meanwhile, only makes money when people order it themselves, and pay for it directly.

For a while, that looked like a vulnerability for Reed Hastings and company. Now, as the company passes the 44 million subscriber mark, it seems like a big advantage.

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