HBO to Rerun Hit Shows on Amazon Prime
Amazon Prime users will get a new perk, and HBO will get a new audience, thanks to a content deal the companies struck. "HBO is looking to capitalize on their premium programming, and this will be a good source of additional revenue," said Peter Koeppel of Koeppel Direct. "By limiting distribution of their programming to Amazon, they are still keeping their premium programming somewhat exclusive."
HBO and Amazon on Wednesday announced a content-sharing partnership that for the first time will allow viewers to see HBO shows on a different platform.
Starting May 21, Amazon Prime Instant Video users will have access to some of HBO's hits that are now off the air, including The Sopranos, The Wire, Eastbound & Down, and Enlightened; mini-series Band of Brothers and Angels in America; and early seasons of Boardwalk Empire and True Blood.
Content also will include comedy specials from comedians like Louis CK and Ellen DeGeneres, as well as HBO original movies such as Too Big to Fail and Game Change.
Later, current HBO shows like Girls, The Newsroom and Veep will become available, likely about three years after they've aired on HBO. The release didn't mention one of HBO's most popular titles, Game of Thrones, currently running in its fourth season.
Win for Amazon
Amazon's streaming service is part of Amazon Prime, the US$100 per year service that offers users free shipping on most items. The video streaming service has grown since its inception, but still doesn't offer some of TV's most popular content, especially compared to competitors like Netflix and Hulu Plus.
In addition, the original content that Amazon has produced for streaming, including shows like Alpha House, have failed to attract the same hype as Netflix's original shows like Orange Is the New Black or the Emmy-winning House of Cards.
That make's Amazon's new deal with HBO a win for the company, said Peter Koeppel, founder and president of Koeppel Direct.
"It's a fairly significant deal for Amazon," he told the E-Commerce Times. "It appears that Amazon is reinvesting revenue generated from their increase in the price of their Prime service to purchase new content, which in my opinion is a smart move."
The race for streaming supremacy isn't over, and Amazon's slower entry into the space could be an indication that the company is learning from its predecessors in order to emerge as a sleeper streaming leader over the next few years, said GigaOM analyst Alfred Poor, author of the HDTV Almanac.
"They've created their own test-market for a flat-rate service using their Amazon Prime members, and they have been very cautious about rolling out content and new agreements rather than challenge Netflix head on," he told the E-Commerce Times."
The company already has so much infrastructure in place that if it continues to make smart content deals, it could be a real contender in the space, Poor added.
"They have an excellent recommendation engine that knows a lot about their products and their customers," he pointed out. "They are excellent at Big Data. In fact, a huge part of their business is based on providing Big Data services to others, so they already have enormous bandwidth and computing power at their disposal, and they know where to get more. They also have an established reputation of working with other suppliers, large and small, which is important in building trust with the content creators."
Looking to Diversify
On the surface, it could seem odd that HBO would be a willing partner in Amazon's quest to acquire hit content. It's the first time that HBO content has been licensed to an online-only subscription streaming service.
However, the deal seems to have been done largely on HBO's terms, Koeppel noted, allowing HBO to profit without giving Amazon users a full HBO Go pass.
"HBO is looking to capitalize on their premium programming, and this will be a good source of additional revenue," he noted. "By limiting distribution of their programming to Amazon, they are still keeping their premium programming somewhat exclusive, and their hottest program, Game of Thrones, was not included in the deal, so people will still need to subscribe to HBO to access that show."
In addition, the company likely understands that the digital entertainment space is changing daily and wants to make sure its streaming service isn't left behind as the industry shifts, said Poor. That makes it a win-win situation for Amazon and HBO, and an indication there could be similar deals in the space going forward.
"The age of linear broadcasting is rapidly coming to an end, and cable companies are not equipped to transform themselves into completely on-demand delivery," he pointed out.
"As a result, HBO is going to have to find new avenues to distribute their content. It's been shown that U.S. consumers prefer bundles, and HBO will eventually have to throw its lot in with Netflix, Amazon, Google or some combination of the three," said Poor. "This new agreement is a good way for them to continue to test the waters, and let Amazon distribute some of their backlist content. I see this as a smart -- almost inevitable -- move for HBO."