Netflix was once nothing more than a competitor to Blockbuster. Order a DVD online, wait a couple days to have it shipped to your house and return it in the same red envelope it came in.

After launching its own online streaming service and airing original programming, Netflix hasn’t just become one of the biggest players in television — it has replaced it. Think about the last time you skipped out on the bars to stay in and watch “Gossip Girl.” You didn’t tell your friends you were watching TV. You told your friends you were watching Netflix.

Enter HBO Now. Announced last week, it’s the next big player in online streaming, joining other video streaming companies in the fight against Netflix. But if Netflix continues to broadcast quality original programming and maintain competitive pricing, it can defend itself well against HBO’s challenge.

HBO Now will cost $15 a month and grant access to all of its content without having to subscribe to a cable package. Prior to HBO Now, people dying to watch “Game of Thrones” or “True Detective” had to have a subscription through their cable provider. Paying for an HBO package through Time Warner or Comcast also gave you HBO Go access, where you could watch the company’s content on-demand.

HBO is the latest company to “cut the cord” with cable and broadcast content directly to paying customers. The field of digital streaming is already crowded with Amazon Instant Video and Hulu Plus, both of which are now producing original content to increase the value of its subscriptions.

But HBO Now has a good shot at Netflix because in addition to well-known television series programming, HBO also boasts a collection of big name films like “300: Rise of an Empire” and the critically-acclaimed “The Grand Budapest Hotel.” Netflix viewers getting lost in the millions of B-list movies available for streaming might find a reason to pay for HBO’s Emmy award winning content.

Netflix is learning that pumping out original content is the only way it will survive. Regardless of how people are consuming television, people want new television to stay tuned in to cultural trends. And HBO is king at delivering buzzworthy content. Just yesterday, Robert Durst of HBO’s “The Jinx: The Life and Deaths of Robert Durst” was arrested, bringing a surge in interest into the documentary.

Compare that to re-runs of “How I Met Your Mother” on Netflix. It lacks the cultural now-factor that people long for.

If Netflix can continue to produce popular shows like “House of Cards” and “Orange is the New Black,” customers will continue to pay up the $7.99 a month for the service.

With HBO Now highballing the value of its content at $15 a month, Netflix could see itself as a medium provider of quality content and bump their monthly costs up to something closer to $10 a month. From a business standpoint, raising the costs of their service could be a smart move as more money is invested into more original shows.

But raise the price too much and customers will start to see good reason to jump over to HBO Now. Netflix will have to walk a tightrope in its pricing strategy in order to incentivize viewers to stay away from the enticing lure of HBO’s quality programming all the while staying affordable.

As Frank Underwood says in “House of Cards,” “For those of us climbing to the top of the food chain, there can be no mercy. There is but one rule: hunt or be hunted.” With the coming of HBO Now, the question is now whether Netflix is the hunter or the hunted.

Brian Cheung is a senior broadcast and digital journalism and finance dual major. His column appears weekly. He can be reached at bkcheung@syr.edu and followed on Twitter @bcheungz.

Published on March 16, 2015 at 12:45 am