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HBO Deal Shows Divergent Paths of Netflix, Amazon

HBO’s deal to license some of its prestigious back catalog to Amazon, announced Wednesday, was widely seen as a blow to Netflix. Netflix CEO Reed Hastings has coveted HBO’s content for as long as his company has been in business of streaming TV shows on-demand. And it was never in the running for this particular deal.

Calling Netflix a loser however—as the stock market did on Wednesday when it drove Netflix shares down by 3%—misses the point of the company’s evolving strategy and the ways in which it’s dramatically different from that of Amazon. Amazon may want to be more like Netflix, but Netflix wants to be more like HBO.

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Relations between HBO and Netflix were already chilly. Jeff Bewkes, the head of HBO’s parent company Time Warner, has downplayed Netflix’s effect on the industry and jokingly dubbed the company “The Albanian Army.” But that was more than three years ago, when Netflix was just ramping up its streaming service. The battlefield doesn't look so uneven today. 

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HBO sold non-exclusive access to high-profile reruns to an outlet willing to pay a lot for prestige while keeping the content away from a company that increasingly looks like a competitor.