HBO Max and Peacock quarrel with Roku and Amazon Fire TV – Variety

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The “streaming wars” are widely viewed as a clash of content titans fighting for an entertainment portfolio for consumers. But behind the scenes, another intense commercial fight is going on between streaming services and the industry’s two heavyweights of connected TV: Roku and Amazon.WarnerMedia launched HBO Max in late May, and more than six weeks later, it’s still a no-show on Roku or Amazon’s Fire TV. Coming soon, Peacock’s national NBCUniversal unveiling on July 15, and it’s also unlikely to be on either platform, sources said.

The clashes, of course, revolve around money. More than that, distribution conflicts concern long-term strategic access to fast-growing audiences in streaming, as well as advertising inventory. A media company executive said Roku and Amazon were asking for “egregious” terms. On the other hand, an insider from one of the highest-ranking platform providers says he is simply looking for “a reasonable share” of the value they create for partners – and adds that companies like WarnerMedia and NBCU come to the table with an “old TV mindset.” ”

The leverage of OTT platforms is real. The two say they have more than 40 million active (and growing) accounts. “Amazon and Roku are starting to play hardball with many of these services,” said Kristen Hanich, analyst at Parks Associates. “They are much more powerful than they were three years ago.”

The breakdowns are similar to the quarrels of television networks with cable and satellite operators. And many in the industry expect them to continue.

For WarnerMedia, the absence of HBO Max on Roku and Fire TV has caused confusion and possibly registration delays. The plan of the AT&T-owned company was to convert the legacy HBO to HBO Max for the same monthly price of $ 14.99, according to the theory that the largest content compartment will attract new customers.

But the impasse with Roku and Amazon threw a key into this. WarnerMedia’s HBO Now app contract for Fire TV expires July 31, sources familiar with the disputes told Variety. So unless the parties can agree on an HBO Max deal before that, Fire TV users will no longer have access to an HBO app (but they will be able to stream HBO content to devices via Prime Video). Roku has an agreement to keep an “HBO” app, which replaces HBO Now from August 1, while discussions on HBO Max continue.

A central stumbling block: WarnerMedia wants to remove HBO from Amazon’s Prime video channels and the Roku channel. This is how the media conglomerate can keep customers within the experience of the HBO Max application, giving it the possibility of collecting data for recommendations and (later) advertising targeting.



Apple, which offers the HBO Max app, has agreed to stop selling HBO through Apple TV channels. But Amazon and Roku resist.

“They want to bring all of this content together into one central experience,” said an industry official familiar with the discussions. “But Netflix will never do that. Hulu will never do that. HBO did it very early, and now Amazon and Roku have a real problem because if HBO is not in their channels, this model collapses. ”

Indeed, the channel aggregation biz has become lucrative for Roku and Amazon. According to Amazon, nearly 5 million HBO subscribers access the service via Prime Video Channels. Overall, almost a third of American consumers who have subscribed to a streaming service in the past 12 months have used aggregation services on Amazon, Roku and Apple, according to a study by Parks Associates at first trimester.

WarnerMedia said in a statement: “We look forward to reaching agreements with the few remaining distribution partners [for HBO Max], including with Amazon and on par with how they provide customers with access to Netflix, Disney Plus and Hulu on Fire devices. ”

Meanwhile, Peacock chief Matt Strauss told Variety, “We are definitely engaged in discussions with all platforms,” ​​and said that NBCU is open to various forms of “value trading” in such transactions.

For streaming services, the problem is not revenue sharing per se. (Roku takes a standard 20% reduction in subscription fees, while Amazon’s take would range between 15% and 45%.) Apple and Google are cutting a comparable share of the subscription dollars that pass through their platforms shapes.

The issues are the extras that Roku and Amazon want to see integrated, including ad inventory (Roku’s standard demand is 30%), rights to resell services in their chain stores, and “free content” for the Roku channel and IMDb television funded by advertising. Roku is also requesting a marketing spend commitment from partners, which gives their channels a preferred menu placement, among other things. (Roku and Amazon declined to comment on specific negotiation points.)

Roku and Amazon are arguably a duopoly, says a media official: “It’s the classic” Put everyone on the platform, “and then change the game.”

The companies in these disputes understand that application crashes are frustrating for their respective consumers. But, as an OTT platform official says, “We are not going to get a bad deal just to get a new streaming service on the platform. ”

Andrew McCollum, CEO of low-cost TV streaming provider Philo, recognizes that there are inevitably disagreements over economic conditions with the platforms. “I think it will be more confrontational over time,” he says. Like the cable and satellite companies before them, platforms like Roku, Fire TV and Apple TV are becoming increasingly powerful gatekeepers.

According to McCollum, “’Direct to consumer’ is a bit of a myth. “



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