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Many times when you hear a Hollywood executive getting defensive about a certain topic, you can be sure the subject matter is one that is based upon reality. An example of this are the recent comments from Time Warner (NYSE:TWX) CEO Jeff Bewkes when talking about the similarities between HBO and Netflix (NASDAQ:NFLX).

At the UBS Conference in New York this week, Bewkes attempted to distance HBO from Netflix by saying he didn't consider Netflix a competitor. Instead, he felt that it was operating in a complementary manner with Time Warner.

(click to enlarge) source: StockCharts.com

That assertion is a weak one when taking into account the fact Netflix is aggressively creating or acquiring original programming in a similar fashion to HBO has in the past. It's doing this in order to differentiate itself from its competitors. This is the reason for the strong denial of similarities between the two services from Bewkes; he doesn't like the idea of the two companies being too similar, as that would blur the identities of the two. If that happened, it would be more beneficial to Netflix at this time.

Add to that the fact Amazon.com (NASDAQ:AMZN) is going to offer its own original programming going forward via its Amazon Prime business, and you can see why Bewkes is fighting to keep HBO differentiated in the minds of consumers and the industry.

(click to enlarge) source: StockCharts.com

The Reason for the Resistance

HBO is one of the few media properties that could not only survive but thrive in whatever business environment that emerges in the industry. As such, it would be a big blow to Time Warner if it was significantly weakened by competition from streamers like Netflix and Amazon Prime.

For example, if a la carte programming (in which consumers choose which channels to buy) was forced upon the industry, HBO would be one of the few brands that would be unaffected by the changes. This is assuming, of course, that it remains the market leader and isn't overcome by its competitors.

It's also a big piece of the puzzle for content distributors, who continually use it as bait to attract new customers to a variety of bundles.

Even though Amazon Prime and Netflix are gravitating toward a similar business model, Time Warner will strenuously fight to keep its brand separate in the minds of its customers.

(click to enlarge) source: StockCharts.com

Business Model

Any business that has a predictable and sustainable future must be able to differentiate itself from competitors. Netflix and Amazon Prime know they can't do that by only offering past TV series and movies, so they're both looking to original programming to keep customers hooked on the services. This is straight out of the HBO playbook, and it's why Bewkes is on the defensive in regard to this competition.

The problem is that just saying that HBO is different from its competitors isn't enough. What the company needs to do is to continue to offer unique programming to keep itself positioned as a desirable content service in the minds of its customers. Only quality content can do that, even if Bewkes attempts to position Netflix as only a complementary service and not a competitor.

In the case of Amazon Prime, it is different because it has bundled some of its services with streaming to offer a more comprehensive product. The most notable are free two-day shipping, no minimum orders, and one free Kindle book to read per month.

As Amazon Prime continues to grow, its original programming and other features will make it stand out from its competitors.

The Future of Streaming

No matter what form the delivery system for TV series and movies takes in the future, it's the content that will determine the success of a company.

It will always come back to that, and the companies that generate long-term earnings will be those that win the content battle. Content will remain king, and that's what needs to be watched by investors in the months and years ahead.

Source: What Netflix And Amazon Prime Are Morphing Into