On Monday, in announcing first-quarter earnings that beat Wall Street expectations, Netflix said its subscriber base had grown by 4 million (to a total of 48.35 million worldwide). It didn’t get to celebrate for long before Amazon and HBO teamed up to rain on its parade.
HBO has been the biggest name in video content creation for at least a decade, with shows from “The Sopranos” though “The Wire” to “Game of Thrones” at the front of the pop cultural zeitgeist. The only way to stream that desirable content has been through the network’s own (very cool) HBO Go app. Until now. Amazon announced this morning that HBO content would be available through its Prime video-streaming service beginning May 21.
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This is obviously a big win for Amazon — one that should help it attract more subscribers even after it recently raised the price of Prime from $79 to $99 a year. And it’s a serious loss for Netflix, which has emerged as the go-to streaming company, helped by the buzzy success of shows like “House of Cards” and “Orange is the New Black.” Spending the weekend “Netflix-ing” was what many did this brutal winter — but getting people to do that, even when its frigid outside, depends on having a library of great content.
A few years ago, Netflix CEO Reed Hastings, like Pepé La Pew chasing the cat, made no secret of his lust for HBO’s programming. He then ramped up the supposed rivalry between the companies and told analysts that his company’s goal was “to become HBO faster than HBO can become us.” (This week, Hastings also played down any rivalry with Amazon Prime, calling the service “very complementary to Netflix.”)
HBO must have seen things differently. Its executives have said that offering a streaming service of their own didn’t not make financial sense…at least not yet. Clearly, they felt a deal with Amazon made more sense. Obviously, there are sizable licensing fees to be made — and it’s certainly possible that Reed’s antagonistic statements in the fall picked their partner for them. HBO reportedly did not bother to seek out bids from players besides Amazon.
With HBO’s shows in its lineup, Prime has some of the most desired content in the business, available for the first time without a cable subscription. Granted, this is only archival content, with newer shows not premiering on Prime until three years after their initial run. And HBO’s “Game of Thrones, for example, is not part of the deal. But for those who never got a chance to check out “Deadwood,” “Rome” or “Six Feet Under,” this deal creates new incentives to investigate Amazon as an alternative streaming option.
Additionally, the HBO Go App is scheduled to be included with Amazon’s Fire TV by the end of the year.
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So in the same week that Netflix announced a price increase of its own, Amazon Prime announces the acquisition of television’s most coveted library. The war for King of the Streamers looked to have been settled, but HBO and Amazon have ensured that it’s only just beginning.
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