How Does HBO Compete With the Deep Pockets of Netflix and Amazon?

HBO vs Netflix

HBO’s ‘Game of Thrones.’ Macall B. Polay/courtesy of HBO

The proliferation of quality content houses for prestige television has put existing platforms in peril. The landscape has changed and what worked strategically 10 years ago may no longer apply. Even more threatening to the status quo: what it cost to develop a hit show a decade ago likely won’t cut it today.

Last year, Netflix handed mega-producer Shonda Rhimes a rich $100 million contract to develop original content. Earlier this year, the streaming platform signed the prolific Ryan Murphy to a deal worth upwards of $300 million. In an age of nine-figure deals, how do members of the Old Guard, such as HBO, compete?

Network president Casey Bloys recently sat down with The Hollywood Reporter and answered a few questions about the battle between HBO, Netflix and beyond.

“For someone like Ryan Murphy or Shonda Rhimes, who are prolific creators of quality content, that is the market now. And it’s a unique skill that they have. But as a business, you kind of have to adjust to the marketplace,” Bloys explained.

So should we expect HBO to start handing out mega deals to proven talent? The premium cable channel recently signed Girls Trip breakout Tiffany Haddish to an overall deal, but it isn’t in the same vicinity as Rhimes and Murphy’s contracts.

“It depends. Ryan or Shonda probably don’t make sense for us because we’re not in the volume business and that’s what they’re getting paid for,” he said. “But in general, across the board, costs are going up because there are so many people making TV. For talent—writers, producers, actors—it’s a good time because the opportunities are now much more plentiful than they were even two, three years ago. And as a business, it’s just a reality that doing a show will cost more.”

Netflix continues to boast broad appeal hits like Stranger Things that can compete with HBO’s Game of Thrones. The next blockbuster threat will likely come from Amazon’s Lord of the Rings TV series (which HBO passed on) and its record-setting price tag.

Is there any regret now that the series is poised to be the next buzzed about small screen offering?

“[CEO] Richard [Plepler] and I talk about that, too, [and it’s,] ‘Eyes on your own paper.’ And it’s true: we’ve got to stay focused on our goal, which is curating excellent content—not ignoring the outside world because you can’t but also trying not to get too distracted by Amazon has this money or Apple has that money,” Bloys said. “Money is obviously very nice, but it doesn’t automatically mean quality. It’s very hard to curate content, and it matters how you engage with talent and how you treat them. And it’s the game we’ve been playing for a long time.”

It’s not as if HBO is ceding its market-leading place to the competition.

In addition to its bevy of prestige series such as Big Little Lies and Bill Hader’s dark comedy newcomer Barry, HBO remains a proponent of the TV blockbuster. Westworld returns for a second season later this month, and Bloys is developing as many as five Game of Thrones spinoffs.

Still, the disparity in resources is worth monitoring over the long-term.

How Does HBO Compete With the Deep Pockets of Netflix and Amazon?