Apple-HBO deal challenges Amazon, Roku ... for now

HBO's decision to launch its standalone streaming video service, HBO Now, exclusively on Apple (NASDAQ: AAPL) TV--with first availability in early April--has rearranged the streaming space by giving Apple exclusive rights to a premier content provider and leaving competing players Netflix (NASDAQ: NFLX), Amazon (NASDAQ: AMZN) Prime and Roku to look on. For now.

HBO and Apple used an Apple event in San Francisco to announce the partnership through which HBO will offer its standalone OTT service over Apple TVs for $14.99 a month. For that money, those with Apple TVs, whether they have cable TV subscriptions or not, will have full access to an HBO catalog that includes such popular fare as "Game of Thrones" and "Silicon Valley."

However, Apple's exclusivity may be short-lived, said IHS Technology senior television analyst Tim Westcott.

"The lesson from Netflix is that to grow a digital customer base you have to reach consumers on the devices where they choose to consume content. Consequently we don't expect this exclusivity to remain over the long term, unless HBO is heavily compensated," Westcott said in a statement.

An unnamed source at Roku offered a generic response to the news, telling Tom's Guide that "In general, broad distribution is important to content providers and especially for a new service where the goal is to gain as many subscribers as possible."

On the topic of gaining subscribers, it was only last month that HBO CEO Richard Plepler, on a Time Warner earnings call, was praising a subscription VOD deal covering older shows that the company had cut with Amazon Prime.

"We had the biggest sub growth last year any time in 30 years," Plepler said, noting that many factors contributed to that and "Amazon might have been one of them because people have an opportunity to see what they previously haven't seen."

With Apple, viewers will be able to see what they haven't seen at the same time they're seeing what everybody else is seeing.

"All you need to get HBO Now is a broadband connection and an Apple device," Plepler said at the Apple event. "There will be a brand new HBO Now channel on Apple TV so you can enjoy it on the big screen or you can watch HBO Now on your iPhones and iPads."

Apple has sold 25 million Apple TVs and is hoping that a price reduction from $99 to $69--also announced at the event--will jack up those numbers.

Dan Cryan, director of broadband analysis for IHS Technology, called the pairing a big deal as, "at least for the moment, it means that there is a clear point of differentiation for Apple devices."

For the moment Apple was savoring the victory.

"Apple TV will reinvent the way that you watch television and this is just the beginning," Apple CEO Tim Cook said.

That reinvention may still have a while to go, according to TechCrunch, which reported that some observers had expected Apple to introduce a new platform with a slimmer set-top box, an improved remote control and redesigned operating system--but that didn't happen.

For more:
USA Today has this story
TechCrunch has this story
VentureBeat has this story
The Street has this story
Tom's Guide has this story
Hollywood Reporter has this story

Related articles:
HBO Now to launch exclusively on Apple TV, iOS devices in April
Rumor mill: 'HBO Now' will launch as a $15-a-month a la carte service in April
Apple TV sales reportedly slowing, while Fire TV revs its app engine
Amazon's Prime streaming subs drive its overall sales; membership jumps 53%
Amazon, Roku promote Sling TV with free streaming stick offers

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