AT&T/WarnerMedia’s new streaming service, HBO Max, boldly launched last week without the app support of the two biggest streaming device ecosystems, Roku and Amazon Fire TV, and it doesn’t appear that the telecom is close to a deal to integrate its app into either platform.
Engaging in a Q&A with The Verge, Tony Goncalves, the longtime DirecTV executive, current CEO of AT&T’s Otter Media division, and executive leader in the development of HBO Max, conceded that it is “really, really important” for HBO Max to be available on platforms that consumers use to access new networks.
But … “We’re just starting from a very, very different place,” he said. “We have 30-plus million existing subscribers that have already gone in their pocket and voted to subscribe to a product, and we’re making that product better. We think the value prop is there. We just want to be treated fairly.”
AT&T’s legacy HBO Now app has been a lynchpin property in the development over the last five years of Amazon Prime Video Channels, Amazon’s market that repackages streaming services and funnels them through the company’s app. Roku has copied that “Channels” strategy, and markets HBO Now the same way. Now that HBO Now its 30 million subscribers have evolved into HBO Max, AT&T wants to take the whole enterprise truly direct-to-consumer and is no longer willing to let its content—and the requisite data—be dis-aggregate through Roku and Amazon apps.
Notably, Netflix, Hulu and Disney Plus are all available on Roku and Amazon directly via their own respective apps.
“Disney Plus and Netflix and Hulu and these other apps are on those platforms. There’s a certain business model that exists. We just want the same one. I’m hopeful that, ultimately, we’ll get there, and we’ll get there with the consumer in mind. But we just didn’t get there on day one,” Goncalves said.
Roku and Amazon control more than two thirds of the U.S. connected TV market. And the lack of support for these two platforms is souring the view of the HBO Max launch in the eyes of many analysts, who already view the service’s value proposition as being a bit too complicated.
"HBO Max's launch has thus far been notably less smooth than the launch of Disney Plus, due to a variety of factors, including confusing branding, uncertainty about how to get the product, and limitations on how consumers can actually watch the product, particularly on television," wrote Evercore ISI's Vijay Jayant in a note to investors.
“We believe AT&T’s dispute with Amazon comes down to one thing: data,” Jayant added. “AT&T wants Fire users who open HBO Max to be essentially transferred to the HBO platform, so that HBO captures all the data about the customer’s usage, improving the ability to target ads in other parts of the WarnerMedia universe. Amazon, however, wants to keep as much of that data as possible in house.”
Jayant believes the Roku dispute, meanwhile, is primarily centered around advertising.
”While HBO Max doesn’t currently have ads, AT&T does expect to launch an ad-supported version, likely next year, and Roku will want to benefit from that advertising revenue,” the analyst wrote. "We expect this dispute to eventually be resolved, since neither AT&T nor Roku benefits from not having HBO Max available on Roku devices.”
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