Warner Bros Discovery and Amazon have struck a new distribution deal for HBO Max, returning the streaming service to Prime Video Channels.
The agreement undoes a key mission for prior corporate entity WarnerMedia, which launched HBO Max in 2020, two years before merging with Discovery. Former WarnerMedia CEO Jason Kilar, who had a long exec stint at Amazon early in his career, made it a central goal to secure distribution for HBO Max as a stand-alone app on Amazon Fire TV devices as opposed to having it featured as part of Channels. WarnerMedia’s then-parent, AT&T, championed Kilar’s strategy, with CEO John Stankey publicly antagonizing Amazon for what he said were strong-arm tactics. The tangle wound up delaying HBO Max’s availability on Amazon for months, costing the nascent streaming operation access to key new subscribers as it hit the market. Roku, another major streaming gateway, also faced a months-long delay in adding HBO Max after its launch due to WarnerMedia’s posture.
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The duration of the new deal was not specified in the official announcement, but sources familiar with the agreement pegged it at five years.
Discovery+, which is due to be merged with HBO Max in the spring of 2023, has been on Prime Video Channels since its launch in 2021. With more than 200 million members globally, the Prime program is a powerful driver of overall streaming viewership, and Amazon is drawing more and more viewers to Prime Video with offerings like NFL Thursday Night Football and The Lord of the Rings.
Under the Channels setup, Prime members can sign up for HBO Max for $14.99 per month. As with Apple and Google, Amazon’s massive scale enables it to rack up a larger number of subscriptions for its partners with Channels, but there can be sticking points between the parties with the way subscription revenue and customer data are shared. Earlier in the streaming era, programmers have been willing to surrender a certain amount of proceeds and data in the name of attaining scale, calculating that it is worth the tradeoff.
Kilar’s conviction was that building a true direct-to-consumer streaming business requires control of a great amount of consumer data in order to fine-tune a streaming service’s algorithms, customer experience and subscriber acquisition capabilities. In 2021, when HBO Max came off of Channels, WarnerMedia reported a loss of 5 million subscribers in the quarter when the move happened. All together, HBO Max, linear HBO and Discovery+ now have 94.5 million subscribers.
“We strive to offer customers the best and widest selection of premium content available for their everyday viewing experience,” Prime Video VP Cem Sibay said in a press release. “With the addition of HBO Max again, customers can easily add this subscription and enjoy even more award-winning and fan favorite entertainment on Prime Video.”
JB Perrette, CEO and President, Global Streaming and Games for Warner Bros. Discovery and Bruce Campbell, the company’s Chief Revenue and Strategy Officer, both played key roles in hammering out the new deal. WBD “is committed to making HBO Max available to as broad an audience as possible while also advancing our data-driven approach to understanding our customers and best serving their viewing interests,” Campbell said. Perrette said WBD’s aim is “to delight customers with great content and continue to collaborate and innovate so we can best serve our subscribers.”
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