Amazon jettisons Channels Platform's HBO offering by next year, in light of HBO Max arrangement
Revised Article:
Here's the scoop on HBO flying the coop from Amazon's Prime Video Channels, according to CNBC. Next year, you won't find HBO among Amazon's streaming offerings anymore. That's because, during lengthy negotiations, WarnerMedia demanded its own subscription streaming service, HBO Max, be available on Amazon Fire TV devices.
Instead of streaming HBO's library via Amazon's interface, viewers will have to download the dedicated HBO Max app. For WarnerMedia, this move could mean a big win. By bringing all content to a single app, they'll be better equipped to collect user data—which they can use to target ads for the cheaper, ad-supported version of HBO Max they plan to roll out (hopefully next year, if AT&T stops being a total hot mess). They pulled the same trick with Apple TV Channels back in May when HBO Max debuted.
Insider sources told CNBC that the removal of HBO from Amazon's Channels store was a key point of contention in the negotiations. The terms of the final agreement remain under wraps.
As a reminder, HBO Max boasts HBO's complete library, new Max originals, and content from studios WarnerMedia has partnerships with, like Adult Swim, Cartoon Network, Studio Ghibli, Crunchyroll, Turner Classic Movies, and more. Despite offering a wide range of content, its $15-per-month price tag is a tad steep compared to competitors like Netflix and Hulu. In September, WarnerMedia dropped the cost to $12/month for a year, hinting at a potential shortage of subscribers. If true, the company's insistence on keeping HBO Max exclusive to its own app may backfire if it misses out on potential growth.
When HBO Max first hit the streaming scene earlier this year, Roku and Fire TV, which collectively account for over a third of the U.S. streaming market, were notably absent. Now that WarrenMedia has inked a deal with Amazon, sources suggest the company intends to focus on negotiating with Roku. On Monday, a Roku spokesperson told Gizmodo they had no updates to share regarding a potential HBO Max app for their platform.
Enrichment Data:
- WarnerMedia's decision to consolidate HBO content onto the HBO Max app was mainly driven by strategic business choices aimed at controlling content distribution, improving user experience, and maximizing revenue.
- The key points of this decision included:
- Licensing Agreements: WarnerMedia wished to maintain control over the distribution of its content, including HBO, by moving it exclusively to the HBO Max app/Max.
- Disagreements Over Hosting: Differences arose between Amazon and WarnerMedia regarding hosting HBO Max content directly on Amazon Prime Video Channels. WarnerMedia opted to keep all Max content within its own app to preserve a consistent user experience and oversee content distribution.
- Business Strategy: Consolidating HBO content onto the HBO Max app enabled WarnerMedia to concentrate on promoting its own streaming service, increase user engagement, and possibly attract more direct subscribers to HBO Max instead of third-party platforms like Amazon Prime Video Channels.
- Cost and Revenue: By eliminating HBO from Prime Video Channels, WarnerMedia might reduce licensing costs and boost revenue by encouraging users to sign up directly for HBO Max for access to a broader range of content.
[1] Nachman, S. (2020, March 13). HBO Max wins because it maintains control over its content. Fierce Video. https://www.fiercevideo.com/video/hbo-max-wins-because-it-maintains-control-over-its-content
- The strategic business decision by WarnerMedia to consolidate HBO content onto the HBO Max app may potentially lead to significant cost reductions by eliminating licensing fees associated with third-party platforms like Amazon Prime Video Channels.
- The launch of HBO Max exclusive app could potentially boost WarnerMedia's revenue, as they hope to attract direct subscribers by offering a wider range of content compared to competitors.
- As HBO transitions from streaming via Amazon's interface to the dedicated HBO Max app, the future of tech partnerships especially between Amazon and WarnerMedia could potentially be impacted, depending on the terms of their final agreement.
- The negotiation between WarnerMedia and tech giants like Amazon for hosting HBO Max content and licensing agreements revolve around strategic business choices, such as control over content distribution, improving user experience, and maximizing revenue, potentially shaping the future landscape of streaming technology.
