HBO to Netflix: No more discount DVDs, Blu-ray

Nathan Pensky · January 5, 2012 · Short URL:

HBO making Netflix pay retail for its content is a mostly symbolic gesture between rivals

For those of you who were waiting for HBO and Netflix to bury the hatchet -- and for the latter to hopefully start streaming more HBO content -- you're going to be waiting for a long time.

As Netflix CEO Reed Hastings said last December, Netflix and HBO (more specifically HBO's netflix-like online service HBO Go) are "rivals."

Well, that rivalry just got a little bit deeper, as HBO has reportedly stopped selling its DVD and Blu-ray discs to Netflix at wholesale prices; Netflix will have to buy the discs for HBO content -- shows like "True Blood," "Boardwalk Empire," and oldies but goodies like "The Sopranos" and "Curb Your Enthusiasm" -- at retail prices just like everybody else.

The discount stoppage went into effect at the beginning of 2012, but major news sources are just catching on now. The lack of discount will not financially affect Netflix in any significant way, except in what it signifies, a deeper rift between two companies that Hastings has perhaps rightly characterized as a potentially costly rivalry.

“I think the two of us will compete for a very long time; hopefully we’ll make ourselves both better through that competition,” Mr. Hastings said at a recent media conference, according to the New York Times. The inferrence there is clear, that there could be potential for the two streaming content sites to get in each other's way, rather than engender a spirit of capitalist competition that makes both brands better, steel sharpening steel and whatnot.

Part of the bitterness between the two companies likely has to do witht he fact that the corners of the entertainment industry that each company is hoping to move into is dominated by the other. Netflix has recently made a move into original programming, an area which HBO knows a thing or two about, while HBO and its HBO Go site is getting bigger in the online content-streaming world, where Netflix has ruled the roost for years, (Quikster notwithstanding.)

Netflix will premiere both its first two original shows in 2012 -- "Lillyhammer," about a New York mobster who moves to Norway in the witness protection program, and "House of Cards," about British politics. Meanwhile, the very well-received HBO Go replaced the company's previous online presence HBO Broadcast in February 2012.

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