Week In Review: HBO Plays Hardball, Amazon Goes Linear

1. HBO Plays Hardball

In an email Friday morning, Lightshed’s Rich Greenfield dropped the bomb that AT&T plans to sunset both the HBO Go and HBO Now apps on July 31st. His proof was an email Roku sent to Go subscribers that stated as much, so unless someone screwed up the email, Greenfield’s not speculating.

Prior to this, everyone had assumed that HBO was going to sunset the Go app, and turn Now into something called HBO, which would function just like Now and allow the seven million or so Now subscribers to continue watching via the app, which appears to no longer be the case.

But late Friday afternoon, Warner reached out to Greenfield and clarified that they would not actually be sunsetting the HBO Now app on Roku devices. (Likely due to contractual obligations.)

Amazon Fire TV users, OTOH, are apparently still SOL, as they will not have any HBO apps, Max, Now, Go or otherwise.

Why It Matters

Quick recap: Amazon, Roku and AT&T are engaged in something that looks, feels and sounds a lot like a carriage fee negotiation. Amazon and Roku want to make the new HBO Max app part of their channel stores, the way Go and Now were, which means that many (possibly most) viewers will access the app via Amazon Prime or The Roku Channel and not the dedicated app AT&T has created for Max. 

This is an issue for AT&T because (a) they lose subscription revenue, (b) they lose ad revenue, (c) they lose viewer and advertising data, and (d) their app is designed to increase stickiness and time spent with Max.

That said, somewhere between two-thirds and three-quarters of all streaming TV viewers access TV via Amazon and Roku, both via the devices and via TVs with the OS.

And that’s why it matters, because if Max is unavailable on both those platforms, viewers are likely to just forget about it.

Or blame AT&T/HBO

Or both.

And given the massive confusion around the app and where it is and isn’t available like it’s going to be the likely outcome.

What’s happening right now is that they’re both just playing a big game of chicken, only the stakes are much higher for AT&T than they are for Roku and Amazon.

Few people are going to get rid of Fire TV because it doesn’t have a dedicated HBO app. Especially since the main alternative, Roku, won’t have a way for them to log in with their Amazon credentials, and neither operating system will have a way for anyone to download HBO Max.

What’s more likely is that Amazon’s HBO subs will watch via Amazon Prime and get used to watching that way. And that subs who subscribe via an MVPD (the Go subs) will download the TV Everywhere app their provider offers and watch HBO shows on demand that way.

If it’s even an issue--other than the Perry Mason reboot, there’s not much new on HBO right now and there are many other Flix options for someone who is looking to watch reruns and isn’t wedded to the idea that they need to be Friends reruns. 

That may change soon enough, but for now, there’s not going to be a huge demand for HBO, which gives Roku and Amazon an even bigger advantage.

The other thing to watch here is who consumers blame for the hassle and right now it looks like HBO has a giant target on its back.

In the old school carriage beefs between MVPDs and networks, consumers blamed the MVPDs. But the reason for that is twofold: consumers traditionally had a contentious relationship with MVPDs (e.g., they hated them) and it was easy for consumers to understand that the beef was all about money. 

Here, most people like Amazon and (especially) Roku, as they see the latter mostly as a device that makes their lives easier and doesn’t cost a lot of money. Then there’s the second part, that what HBO is asking for isn’t money, but data, as in “we want Roku to turn over your viewing data to us” and as you might suspect, that is not going to create a lot of sympathy for HBO.

So there’s that and that fact that we’re still not convinced that people who subscribe to HBO so they can watch Curb Your Enthusiasm and Westworld are all that bothered that they don’t have access to Friends reruns and Harry Potter movies.

Just a hunch. 

What You Need To Do About It

If you’re AT&T, you’d better be feeling really lucky or maybe you know something we don’t. Because watching HBO via Prime or TRC is not all that onerous and most people won’t be all that aware you’re still beefing with Roku and Amazon. There are seven other Flixes out there right now, so it’s not like they don’t have options.

If you’re Roku and Amazon, just keep your eye on the spin. Right now, if social media is any indication, viewers seem to be placing the blame on AT&T/HBO.

If you’re everyone else, time to freshen up the popcorn.

2. Amazon Goes Linear

Some good sleuthing by our buddy Janko Roettgers at Protocol revealed that Amazon is looking to launch some linear channels on Prime (or maybe IMDBTV--it’s never exactly clear where one ends the other begins.) There are job listings posted and all that, so it’s clearly gone beyond the “just thinking about it” stage.

Why It Matters

Amazon (and everyone else) has been looking at the success of the FASTs (free ad-supported streaming TV services) and thinking “yeah, we want some of that too.”

Three of the biggest FASTs, Pluto, Xumo and Tubi are now owned by VCBS, Comcast and Fox, respectively, so they’re not going anywhere. 

It seems people do like watching linear feeds too--one less thing to think about when they turn on the TV, and if those feeds are mostly reruns, they don’t feel too bad about tuning in midway.

It seems Amazon is looking for 24/7 streams too, so there’s also the chance they are going to see if some of the smaller cable networks, the ones likely to get cut from MVPD lineups when cord-cutting picks up for real (40 million+ unemployed will do that) are willing to dance. 

That’s something we’ve been talking about for a while--that the Flixes are logical new homes for smaller cable networks who will assume more of a studio role, putting out say five to 10 hours of new programming every week, but mostly relying on reruns.

And to circle back to an earlier snide remark, it will be interesting to see where IMDBTV falls out in all this. Will Amazon keep trying to make it happen or will they just fold it into Prime, which is what we’d recommend. (Not that anyone is asking us, but if they did…)

What You Need To Do About It

If you’re Amazon you might read the bit in Alan Wolk’s book “Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry” where he talks about the rise of personalized linear channels on OTT, similar to Spotify’s Daily Mixes. If you’re Amazon and you have all that data, that can’t be too hard to do and would get you hella PR.

If you’re a smaller cable network and your future isn’t feeling all that certain, a Zoom call with Seattle might be in order.

If you’re a cable bundle (work with us on this one), this is not good news for you. You might want to consider your options, like a super skinny version with just the broadcast networks. Because linear channels on the FASTs have that “free” thing going for them and that is hard to argue with.