Amazon announced yesterday that Home Box Office Inc. (HBO) and Cinemax would be joining its Amazon Channels program, making current episodes of HBO shows such as Westworld, The Night Of, and Divorce, available to Amazon Prime subscribers. Amazon subscribers can also catch up on older shows such as Game of Thrones and Silicon Valley.
The Amazon Channels program is an extension of a program Amazon launched a year ago, called the Streaming Partners program. Under this, Amazon has already bundled more than 70 video services, which can be added to an Amazon Prime Video subscriber's membership. These existing partners include OTT services from fellow premium channels Showtime and Starz, as well as a range of other providers, including Acorn TV, NBCUniversal's Seeso, Machinima, Warner Bros.' DramaFever, Tribeca Shortlist, Comedy Central's Stand-Up Plus, PBS Kids and Fandor. (See Era of OTT Aggregation Beginning, Says New Study .)
The deal with HBO, however, is different on two counts. Firstly, HBO has its own successful OTT service in HBO Now, available in many countries around the world (as well as being part of most pay-TV providers' TV Everywhere services in the US under the HBO GO brand). But also, given the success of Game of Thrones and a library of very successful and critically acclaimed shows, the HBO deal simply is more important.
HBO and Amazon had agreed to offer HBO content to Prime subscribers two years ago, but that was for content that had aired on HBO a minimum of three years earlier. It did not include newer, more buzzworthy programming, such as Game of Thrones and the much touted Westworld.
However, Prime subscribers will have to pay an additional fee to access HBO content under this new deal, and it is exactly the same as if they subscribed to a standalone HBO Now: $14.99 per month, with another $9.99 if users want to include Cinemax. No discounts are available, but Prime users get a free month to experience the service for themselves.
We have written in the past about the profusion of OTT providers, and how, sooner or later, consumers will become frustrated by the need for multiple subscriptions to get the content they want. I believe there is an opportunity for operators to take on this role, and start aggregating OTT services and delivering them to the TV -- as many are doing today. My colleague, Brian Santo, argued that this role would be better served by an OTT provider. (See Growth of Netflix Competitors Could be Positive for Pay-TV Providers and OTT Competitors Should Unite.)
Even though this is a relatively small step, given that consumers will be paying the same amount as for HBO Now purchased separately, I believe it is in the right direction. From a consumer's point of view, at least it is one service, one bill, and one provider.
In previous Heavy Reading research, the single biggest driver for subscription to a triple-play bundle was the convenience of a single bill and provider. So it is an important issue. But I should also point out that, despite this, getting subscribers to actually subscribe to the triple-play invariably required a catalyst -- either a physical move (change of home) and/or a bundled discount.
In the longer term, I think Amazon will have to find a way to engineer that discount to make this work.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation