HBO Won’t Renew Amazon Library Deal

Plepler says deal will expire in 2018
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Time Warner Inc.’s Home Box Office won’t renew its library distribution agreement with Amazon Video when it comes due at the end of 2018, premium network chief Richard Plepler told analysts Wednesday.

When it was announced in 2014, the HBO – Amazon deal was touted as groundbreaking. But in a conference call with analysts to discuss first quarter results, Plepler said the alliance has achieved its goals.

“As we see the progress and sub revenue acceleration in our digital business, I don't think you’re going to see us extend or expand our relationship with our library programming on Amazon, and we have no plans to do that beyond the end of the date, which is the end of next year," Plepler said on the call.

Since then HBO has launched its own OTT service – HBO Now and the novelty of having mainly older series like The Sopranos, Deadwood and Six Feet Under available on Amazon Video has apparently worn off.

Amazon began selling HBO and Cinemax subscriptions through Amazon Channels in December, which Plepler said has “enormous momentum” and will continue.

While its Amazon relationship transforms, Time Warner CEO Jeff Bewkes said emerging virtual MVPDs like Hulu’s Live TV service – released on May 3 – and others are helping to drive growth.

On the call Bewkes said vMVPDS are “mitigating some of the declines of traditional providers. It also proves there is consumer demand for smaller video packages with top networks, lower prices, depending what the appetite of a given household is and better interfaces for VOD, search and channel surfing. If new offerings can combine that kind of attractive pricing and packaging with the sort of new 21st Century platform and interfaces, then we think they can definitely attract new subscribers into the network system.”

Turner Networks chairman and CEO John Martin said that continued consolidation in the content market will help his channels. He added that some networks from other content providers offer little value for their affiliate fee dollar.

“In a perfectly competitive market those [networks] are eventually going to go away,” Martin said. “That will be good for us. We have 10 network brands, three of the top 10, four of the top 20. I think we’ve got incredibly popular networks and the most concentrated portfolio of popular networks in the United States. I don’t see any need for further consolidation. I think other network groups are going to need to consolidate.”