Today's Hard|Forum Post
Today's Hard|Forum Post

Friday May 05, 2017

HBO Declines to Renew Amazon Contract Leading to Removal of Shows in 2018

Time Warner Inc. has decided to remove HBO from the Amazon Prime streaming service in 2018. This change stems from a change in perception of Amazon's streaming service as they now see it as a competitor. HBO's CEO Richard Pepler discussed how immensely popular older HBO shows were on the Amazon Prime streaming service. Amazon in 2014 was granted the right to stream finished shows that were 3 years out of their original run on HBO. This $250 million - $300 million deal doesn't make sense for HBO after analyzing the popularity of the shows. They have decided to play the long game and add them to the standalone HBO Now service as they see these older gems as added value to attract more consumers to their service.

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Will this change your perception of the value of the HBO Now or Amazon Prime? Do you think the immense value that HBO is seeing for their shows on Amazon comes from the marketing time and dollars that Amazon themselves invested into making Amazon Prime so wildly popular? Will consumers; especially Amazon Prime users forget about those older shows when the $4.5 billion investment into original programming that Amazon is spending on content starts appearing on the service? 3 years isn't a long time for TV watchers to forget your show ever existed, but eventually consumers will. Then HBO will be grateful that a service like TV Land wants to run them.

"I don’t think you’ll see us extend or expand our library programming on Amazon beyond the end of next year," Plepler said. He cited the "enormous momentum" of sales through Amazon’s service set up to help market streaming offshoots of traditional TV channels such as HBO, Showtime and Starz.

Plepler said HBO Now was also seeing strong momentum in sales through DirecTV Now, the low-cost digital MVPD service that launched late last year by AT&T. AT&T and HBO parent Time Warner, of course, are in the midst of an $85.4 billion merger that is expected to close by year-end, as Time Warner chairman-CEO Jeff Bewkes reiterated on the call.

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