Developing a new over-the-top, a la carte service is bound to create drama for HBO at some level. Some of that was revealed today as reports surfaced that the premium network will outsource its streaming to MLB Advanced Media--and news broke that HBO's chief technology officer, Otto Berkes, has resigned.
Fortune reported the news, citing "sources familiar with the situation," and noted that HBO plans to launch its standalone streaming service in conjunction with the premiere of its massively popular series Game of Thrones in April 2015.
HBO had initially planned to build its streaming platform in-house, under a project named "Maui." An internal memo instead announced that the project had been cancelled and an outside source would be used, Fortune reported.
"This decision was not made lightly, and was based on an assessment of risk and scope of the product needed to meet HBO's short term business needs for April 2015," read the memo, written by Mark Thomas, SVP of technology program management, and Drew Angeloff, SVP of digital products, and circulated by Fortune. "This was not a judgment of the team's work quality or deliverables but rather a bet that an existing streaming service could deliver the needed product faster and at lower risk than Maui."
Maui technology will still be used to power HBO GO, the memo added.
Berkes' resignation clearly indicates his view of the decision. Hired in 2012 to head up HBO's digital media unit and oversee its OTT transition, he stepped down immediately after the announcement was made. But rumors already were swirling that he was about to be fired or demoted. One source told Fortune that "he hasn't really done anything" to improve HBO's current online product.
MLB Advanced Media has provided white-label streaming services for more than a decade, and powers OTT delivery for many big-ticket sports events and other companies. Turner Sports, for example, saw record spikes in online traffic during March Madness. WWE Network uses MLB as its streaming service to support both its regular OTT programming and special events like Wrestlemania.
The ability to handle massive traffic spikes is something HBO GO hasn't mastered. That was painfully evident during the premiere of one of its top-ranked series, True Detective, when the TV Everywhere service crashed hard.
With the entire media and entertainment industry watching HBO's move into standalone streaming, HBO can't afford technical glitches. And with an April launch date planned for the service, it's out of time when it comes to developing an in-house streaming solution. Going with MLB is likely a very wise choice.
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