HBO Max launched today, but if you are a Roku or Fire TV user, you can’t watch the service on your TV. The fight is all about consumer control, and it shows the power the big connected TV platforms have over what we see.
HBO Max offers an impressive selection of timeless classics, power franchises, mixed with a smattering of new content. There is something in there for everyone, and many will want to give it a try.
If their connected TV (CTV) platform of choice is from Apple, Google, Hulu, YouTube TV, Xbox 1, or PS 4, they will have no problems watching on their TV. However, if Roku or Fire TV is their platform of choice, they will be out of luck. Moreover, with 80 million active users between them, they represent the majority of connected TV users.
How could AT&T launch with such a massive hole in its distribution? Simply put, it couldn’t reach an agreement on terms with Roku and Fire TV to appear on their platforms. The fight between the connected TV platform providers and SVOD providers is not a new one. Moreover, there is no easy answer as they fight for customer control and the revenue and data it brings.
Fire TV’s beef with AT&T (1:31)
Amazon says it has 5M people signup for HBO Now through its Channels SVOD aggregation service. It believes those customers should get the new HBO Max content without leaving the cozy confines of Channels:
“AT&T is choosing to deny these loyal HBO customers access to the expanded catalog. We believe that if you’re paying for HBO, you’re entitled to the new programming through the method you’re already using. That’s just good customer service, and that’s a priority for us.”
Channels is simple for customers to use, but it slices and dices partner content into a uniquely Amazon experience. It also collects a portion of the SVOD provider’s subscription fee and keeps all the customer usage data.
Roku’s beef with AT&T (3:04)
Roku also resells HBO through The Roku Channel, using the same model as Amazon Channels. However, it is taking a slightly more conciliatory tone than Amazon:
“Unfortunately, we haven’t reached agreement yet with HBO Max. While not on our platform today, we look forward to helping HBO Max in the future successfully scale their streaming business.”
That said, it still wants people to access HBO content through The Roku Channel so it can collect a portion of the subscription fee and user data.
What this means for all SVOD providers (3:54)
AT&T simply wants to keep all the $14.99 subscription revenue and all customer usage data. However, John Stankey AT&T’s new CEO, recognizes taking back customer control is a head-on assault on the CTV platform providers’ business:
“We must be doing something right if somebody believes we are now starting to be more in conflict with their business, so I don’t necessarily take that as a bad sign.”
Now, AT&T will eventually work the issues out with Roku and Amazon. What is more, I’m betting AT&T will mostly get what it wants. Other major platform providers like Netflix and Disney+ do not appear in Amazon Channels or The Roku Channel. What’s more, Disney+ got in a fight with Roku when it first appeared and quickly worked things out. AT&T’s WarnerMedia content is must-have for Roku and Fire TV, and they will make sure their customers can get, even if it is only through the HBO Max app.
Unfortunately, smaller services do not have the same bargaining power. They are stuck with whatever terms the platform providers offer. After all, 80 million active users is simply too big a chunk of the market for any service to ignore.
Consumers are stuck in the middle (5:39)
Where are consumers in all this? They are caught in the middle. They purchased a Roku or Fire TV to get access to their favorite services on TV, not to have those platforms decide which services they can watch. Unfortunately, that is precisely what is happening, particularly with the smaller video services.