New Topic

INVEST IN NETFLIX VS HBO

  • 14 August at 16:12 - by Wayne.-M - 830 views

Share:

Which is the better stock to buy now? NETFLIX or HBO

6 Answers

Before getting started, let's get one thing clear: we can't really have a stock face-off between Netflix and HBO. HBO is a subsidiary of Time Warner , along with a host of other content producers: TBS, Warner Brothers, and CNN, to name a few. But make no mistake about it: HBO is a crucial part of Time Warner's empire. And as the world of content delivery changes before our eyes, HBO could be one of the most important pieces of Time Warner's future.

Both Netflix and Time Warner benefit from two huge moats: the strength of their brands, expensive original content, and growing user bases. While Netflix got its start by mailing DVDs, the company has successfully -- with a few bumps along the way -- made the transition to streaming. In fact, a 2016 study found that Netflix was one of the top three most loved brands in the U.S., U.K., and Brazil.

The company also has 94 million subscribers worldwide -- a number that only continues to grow. Netflix hooks people in with original content like Orange is the New Black or House of Cards, keeps them there by keeping prices as low as $8 per month, and benefits from the fact that for most people, paying the Netflix bill is a set-it-and-forget-it routine.

On another side, HBO accounts for just 20% of the company's revenue. Turner Broadcasting -- the rest of the cable channels -- and Warner Brothers account for the rest. While there's no doubt that these are strong brands, the move toward cord-cutting could offer a serious threat to 80% of Time Warner's revenues.

Therefore, my vote goes to Netflix.

15 August at 15:04 - by neeta04money

In light of the Netflix earnings yesterday and the subsequent stock pop, I still fail to understand why people are so hot on Netflix stock.

Currently, Netflix is valued at $50b and time warner (parent of HBO) is valued at $75b. HBO has more penetration (currently) and just flat out better content. Netflix has better technology but i don’t think much difference to consumers in the long run.

15 August at 16:00 - by Kim_EW

Take a look at its price now. The market has been flat since your OP but Netflix has gone up a lot.

HBO is a dinosaur. They are having trouble adapting in the streaming marketplace. They have a lot of work to do to adapt their business model.

16 August at 13:48 - by 222Peter

First, it's always about growth. Netflix might be overvalued, but it is definitely growing faster than HBO which is only a part of a very steady empire. People like growth stocks.

Second, if TW spun off HBO, sure you could put your money in HBO. But right now, you're putting money into the gazillion things on that list you linked to, and a lot of investors don't like that. Netflix's business is simple to understand. Their growth rate is simple to see. Just TW movie studios can kill any profit HBO generates in a bad year.

17 August at 00:19 - by neeta04money

To be honest, neither one of these companies is in a particularly enviable position. Netflix is losing cash flow hand over fist thanks to its growth initiatives, while Time Warner has a ton of debt on hand relative to its cash position.

They're both in bad shape, but equally bad shape, making this a tie.

18 August at 14:15 - by marlamad

If I had to bet, I'd say both will be very well established and healthy 10 years from now and well positioned for when cable declines in importance.

My issue is with the current valuation of NFLX. And from what I see, I think it's bonkers compared to HBO's parent, TWC.

18 August at 22:52 - by patevergreen99
Answer the question

Recent articles

Investments Overseas

Do you want to invest overseas? Investing overseas can provide investment opportunities not available in the U.K. However, if you want to discover if international investments are right for you, have a look at our guide and learn everything you should know about their risks and benefits. 


Effects of Brexit on Investment

How has Brexit impacted investors? Is it the right time to invest? Trying to predict which sectors will gain or lose is pointless. However, you can surely read this article and discover the consequences of Brexit on economy and investment.


Investing in Gold Bullion

Many people are thinking about gold bullion as an investment. However, learning how bullion investments works can be the difference between failure or success. Therefore, make sure you understand everything we explain in this article before making your investment.