As Netflix starts to stock up on original TV shows, it is identifying its biggest competitor as HBO, the premium cable channel.
“They’re becoming more Netflix-like,” Reed Hastings, Netflix’s chief executive, said Tuesday, citing the online streaming product HBO Go, which he called “quite impressive.”
And “we’re becoming more HBO-like,” he said, citing Netflix’s successful bid to distribute “House of Cards,” a coming drama series. HBO is also believed to have bid for the series earlier this year.
“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 media conference hosted by UBS.
The fact that Mr. Hastings brought up HBO, and not Amazon or Microsoft or Verizon, could indicate that Netflix is focusing on differentiating itself by distributing TV shows that no one else has, as HBO does. For years, HBO has been known for series like “The Sopranos,” “The Wire” and, more recently, “True Blood” and “Boardwalk Empire.”
Along with “House of Cards,” Netflix recently ordered new episodes of “Arrested Development,” a sitcom that Fox cancelled several years ago but that has remained popular on the streaming service.
It’s possible, Mr. Hastings said Tuesday, referring to HBO and Netflix, that “many people will subscribe to both services because we’ll have distinctive content.”
“In a good scenario,” he added, “we’ll push each other, like the way two runners push each other.”
The comments are all the more notable because HBO is owned by Time Warner, whose chief executive, Jeffrey Bewkes, has been dismissive of Netflix in the past. His tone has shifted this year, however, and at the conference on Tuesday he said bluntly, “Netflix is our friend.” That is because Netflix has paid to license shows from Time Warner and other major media companies, helping to create a new revenue stream for the companies.
Asked about Mr. Bewkes, Mr. Hastings said Tuesday, “Jeff’s a great, provocative guy.” He added that investors should worry only “if Jeff stops talking about us.”
HBO does not compete directly with Netflix because HBO is sold as an add-on to cable and satellite subscriptions. HBO Go, which streams the company’s library of TV shows and films, is available only to authenticated cable subscribers. But someday, Mr. Hastings suggested, HBO could sell the HBO Go product directly, going around the cable and satellite companies that it depends on today. “Then it will be a more direct competition,” he said, seeming to assume it will happen someday.
Until then, they will compete for content. Mr. Hastings deemed it “a bit of an arms race between us.”
HBO declined to comment.
Asked about Netflix’s recent embarrassments — the company said it would spin off its DVD-by-mail service as a separate company, then reversed itself amid a customer outcry — Mr. Hastings said, “We’re not losing too much sleep over it.” He reaffirmed that Netflix views online streaming, not DVDs, as its source of long-term growth.
When the UBS interviewer asked, “Back on track?” Mr. Hastings said, “Yup.”
The 10-year ambition for Netflix, he said, is to go global, something it is already starting to do with streaming services in Canada and in Latin America. The company intends to “create a service for the world’s best content for the world’s citizens.”