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HBO Max Slashes Price In Half After HBO Leaves Amazon Channels In Bid To Stem Subscriber Losses

BURBANK, CALIFORNIA - OCTOBER 29: Tony Goncalves, Chief Executive Officer of Otter Media, speaks onstage at HBO Max WarnerMedia Investor Day Presentation at Warner Bros. Studios on October 29, 2019 in Burbank, California.

(Photo courtesy of Presley Ann/Getty Images for WarnerMedia)

WarnerMedia is offering a half-off discount on HBO Max now that HBO is no longer available on Amazon Prime Video Channels.

Today through September 26, the monthly subscription cost will be $7.49 for up to six months for anyone who had accessed HBO via the Channels platform. The discount is available to both new and returning subscribers.

The move is aimed at counteracting the inevitable loss of subscribers due to management’s decision — set in motion two years ago — to break from Amazon Channels. The platform removed HBO earlier this week, ending a relationship that long pre-dates the current streaming era. HBO Max, which encompasses all of HBO’s programming and adds 13,000 hours of additional movie and TV fare, will still be distributed via Amazon Fire TV, which is a different part of the Amazon empire. The Channels business has enabled Amazon to control streaming data to a degree that vexed WarnerMedia and its parent company, AT&T. About five million subscriptions to HBO Max are expected to be leaving the books in the near term, according to sources familiar with the stats. In the quarter that ended June 30, HBO and HBO Max together reported 47 million subscribers in the U.S. and 67.5 million globally. AT&T, after initially breaking out the number of current HBO subscribers who activated their access to HBO Max, now reports the linear and streaming numbers as a single figure. The company’s guidance of 70 million to 73 million global subscribers is not changing as a result of the Amazon situation. AT&T will report its next quarterly numbers in October. In June, HBO Max added a $10 version with advertising and also launched in 39 countries. At $15, the ad-free service is at the high end of the streaming market.

In the initial phase of the streaming era years ago, offerings like HBO Now, Starz, Showtime and CBS All Access saw strong growth via Amazon Channels because of the tech giant’s scale. The companies at the time were willing to trade off access to their data for broad reach. Before its acquisition by AT&T, Time Warner made a number of moves to increase the digital footprint of HBO as cord-cutting started to loom larger. It did deals enabling HBO programming to be ingested by several channel stores run by Amazon, Apple, Roku and others. In those scenarios, tech companies controlled the viewer experience and the data, but HBO got subscription revenue. In the current environment, though, strategic objectives have shifted and media companies are not inclined to surrender data. WarnerMedia CEO Jason Kilar is particularly well-versed in how all of the 1s and 0s add up, having worked at Amazon in the 1990s and 2000s as one of the executives standing up its video business.

John Stankey, CEO of AT&T, has publicly criticized tech giants for exerting too much control over their partners’ customers. HBO Max, which launched in May 2020, struggled early on because it had no distribution on Amazon Fire or Roku, which together reach more than 100 million U.S. streaming homes. “Where the bottlenecks are sometimes occurring are in these commercial agreements,” Stankey said at a Wall Street Journal conference in October 2020. “We should ask ourselves, is that friction somebody really feeling their oats and maybe having market power above and beyond what’s reasonable for innovation?”

In addition to the HBO Max website, the discount is being offered via distribution partners Apple, Google, LG, Microsoft, Sony, Roku and Vizio.

Deadline's Dade Hayes contributed to this post.


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