Chalk it up to more incalculable waste generated by AT&T's ill-fated video strategy over the last half-decade.
Warner Bros. Discovery is negotiating with Amazon to restore HBO to the Amazon Prime Video Channels wholesale market, according to Bloomberg.
"From what we have been hearing in recent weeks, this is a very different deal than what HBO had previously with Amazon," wrote LightShed Partners analyst Richard Greenfield in an investor note Tuesday.
For one, it's believed that HBO Max will now be resold through Channels -- previously, only the legacy HBO app was repackaged through the Amazon Prime Video app through the wholesale platform.
Greenfield said he also thinks that HBO Max is "gaining more comprehensive data sharing from Amazon for viewers that subscribe via Amazon Channels and use the Prime Video app."
The news of HBO's strategic shift isn't at all surprising.
Prime Video Channels was a major subscription driver during the HBO Now era, with the premium channel serving as a valuable wholesale commodity in streaming much the way it had in pay TV for decades.
But when erstwhile parent company WarnerMedia launched successor subscription app HBO Max in April 2020, it didn't want Amazon controlling billing, data and the overall user experience of HBO through its Prime Video app.
HBO's attempt to extricate itself from Prime Video spurred a lengthy impasse that kept the HBO Max app out of the Amazon Fire TV connected TVOS for the service's first six sluggish months on the market.
WarnerMedia finally pulled HBO out of the Prime Video Channels market last August, a move that former HBO chief Andy Forsell said cost HBO around 5 million subscribers.
“It’s important for us to own the customer,” Forssell said at the time. “If the viewer is in the app, we can tailor the home page to them. We can tailor what they show them next. We can respond to that in real time.”
But WarnerMedia was spun off from AT&T and merged with Discovery earlier this year in a $43 billion deal. Discovery's management team, which now runs the operation, has a very different perspective on wholesale aggregation.
This was revealed in April when the company forged an agreement to put Discovery Plus into Prime Video Channels.
Also notable: In April, WBD also made a deal with Verizon to put HBO Max into the wireless carrier's wholesale market, +play.
The abrupt change on wholesale agreements is but one major ongoing pivot for HBO, which had spent millions of dollars on aggressive overseas expansion, only to last week announce that it is halting that agenda to review it under the new Discovery umbrella.
"Assuming a broad-based Amazon deal is about to occur, the obvious takeaway is that Warner Bros. Discovery is focusing on driving high-margin revenue and free cash flow and worrying far less about the long-term strategy behind HBO Max or, at the very least, it is no longer prioritizing HBO Max ahead of everything else at the company, including profits," Greenfield wrote.
NEXT TV NEWSLETTER
The smarter way to stay on top of the streaming and OTT industry. Sign up below.
Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!