Is Netflix Competing with HBO?

Does Netflix compete more with video on demand services,  "premium" video channels such as HBO or online video?  A new study from Parks Associates suggests Netflix competes rather directly with both premium channels and video on demand services. 


You might also argue that Netflix does compete with other "for fee" online services, but probably not with "no incremental charge" online video.
“Consumers can pay for a month of Netflix for about the same amount as for two pay-TV VOD movies,” said Brett Sappington, Parks Associates research director.

“Parks Associates research shows consumers know the quality of the OTT service is not comparable to pay-TV quality, but the cost-benefit comparison is enough to affect their purchase decisions,” Sappington says.

Parks Associates found 16 percent of U.S. broadband consumers, when watching movies on VOD, consider instead using an online subscription service as an alternative. Similarly, 17 percent of those watching TV programs on a premium channel like HBO consider using Netflix instead.

"Netflix is competitive against VOD and premium channels because it has a decisive edge in cost,” said John Barrett, Parks Associates director. “But there are times when the consumer will sacrifice quality for other considerations.”


The point, you might argue, is that Netflix already competes, in some cases, with both premium channels and video on demand.