AMC Networks Inc (AMCX), Time Warner Inc (TWX): Netflix, Inc. (NFLX) Is Killing the Movie Business

HBO is just a part of Time Warner Inc (NYSE:TWX), but it’s a pretty significant chunk. Unfortunately, Time Warner doesn’t break out HBO’s results from its other networks, but the last time it did, in 2009, HBO generated about 15% of Time Warner Inc (NYSE:TWX)’s revenue (as per Forbes). Granted, 2009 is several years ago, but given that HBO’s base of domestic subscribers has remained relatively stable — near 30 million — over the past few years, HBO’s performance likely hasn’t changed significantly.

But perhaps HBO could grow its subscriber base if it offered the network as a stand-alone product similar to Netflix, Inc. (NASDAQ:NFLX). HBO’s app, HBOGO, is — from an interface perspective — every bit as good as Netflix, and can be accessed by anyone with an Internet connection.

But you need a cable subscription to sign up for HBOGO. There have been rumors that Time Warner Inc (NYSE:TWX) is considering offering HBOGO a la carte, but to date, management has downplayed that possibility.

Investing in a post-film world

If 2013 is any indication, the future of video entertainment lies with television — not film. The rise of VOD services like Netflix has made highly serialized programming possible, and from a storytelling perspective, a long-format TV show has advantages over a relatively short film.

Obviously, Netflix benefits both as an owner of content and a platform for older shows from other networks. AMC is more of a pure play on the actual content, while Time Warner Inc (NYSE:TWX)’s HBO subsidiary is a mix of both. Nevertheless, all three stocks should benefit if this trend away from film and toward TV continues to play out.

The article Netflix Is Killing the Movie Business originally appeared on Fool.com and is written by Sam Mattera.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends AMC Networks, Facebook, and Netflix. The Motley Fool owns shares of Facebook and Netflix.

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