HBO has made the strategic decision to pull its library shows off of Amazon’s streaming service after the current licensing pact ends in mid-2018, HBO chairman-CEO Richard Plepler told investors Wednesday during Time Warner’s first-quarter earnings call.
The move reflects HBO’s focus on growing the subscriber base of its HBO Now standalone digital service. Amazon Prime is among the many digital content providers that HBO has teamed with to market HBO Now.
Plepler’s comments indicate that the pace of HBO Now sales through Amazon is strong enough that the licensing deal for a host of older series, including “The Sopranos” and “The Wire,” cut in 2014 no longer made sense. HBO Now’s features include an expansive on-demand library of virtually all HBO original series of the past three decades. In essence, the availability of older HBO shows on Amazon’s paid streaming platform amounted to competition for the library component of HBO Now.
“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.
The Amazon licensing pact was estimated to be worth $250 millon-$300 million to HBO over the four-year term of the deal. Clearly, HBO has decided to play the long game and build up the subscriber base for HBO Now rather than grab the cash from an SVOD library pact.
At the time the Amazon-HBO deal was announced, the plan was for newer HBO series such as “Game of Thrones” and “Girls” to become available to Amazon three years after a series finished the entirety of its original run on HBO. With the licensing deal ending next year, however, HBO’s current wave of shows will not make it to Amazon Prime.
(Pictured: “Six Feet Under”)