Netflix-HBO Nordic Battle 'Not Definitely Indicative' of Looming U.S. Faceoff, Hastings Says

Netflix has competed head to head against the HBO Nordic streaming service for nearly two years in the same four European markets, but the lessons learned there won’t necessarily be applicable to the U.S. when HBO launches its streaming service in 2015 (see 1410150095), Netflix CEO Reed Hastings said on a YouTube Q&A Wednesday with two analysts. HBO Nordic, available in Denmark, Finland, Norway and Sweden, launched in December 2012 as a joint venture with Parsifal International, the Swedish-based pay-TV provider. That’s about the same time Netflix debuted its streaming service in those same four markets. Asked to speculate how the HBO streaming service in the U.S. might be priced and distributed when it ultimately comes out, Hastings recalled that when HBO Nordic launched two years ago, it "chose to price on top of our pricing." Hastings cautioned that pricing overall in the Nordic countries is higher overall than in the U.S. because of the European valued-added tax and a higher cost of living. "So it's not definitely indicative" of the competitive price structure that could come into play in the U.S. when HBO launches its streaming service next year, he said. "But they've been quite aggressive in the Nordics and we stayed well ahead," Hastings said. Later in the Q&A, Hastings again cautioned against reading too much into the Nordic experience in predicting how HBO and Netflix might go head to head in the U.S. "Each market is unique," Hastings said. When HBO Nordic launched, it encountered "some teething problems initially two years ago that they probably would not have in the U.S.," he said. "I think they've been licensing broadly," including having recently licensing "a number" of Starz titles, he said. "So they're willing to license beyond their core platform. They've done pretty well, and we've done very well." Hastings is looking forward to a "fun" period the next few years when "the two of us compete for the best content, the most Emmys, the subscriber growth," he said. "And many, many people will subscribe to both services. So we're looking forward to that. We're just excited that HBO is really in the game with the Internet. They're the leader in their field. They're well ahead of their peer-group. They're ahead of the broadcast networks in this dimension, so it's exciting to see." HBO representatives didn’t immediately comment. Asked to elaborate on the Hastings comment that HBO Nordic incurred "teething problems" when it launched two years ago, Netflix spokesman Don Halcombe emailed us Thursday to say the company would have "nothing to add."