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Sandy Berger: Why the Amazon HBO Deal Is So Key

The Amazon HBO deal matters more than you think, says Sandy Berger. It stands to change the very future of content delivery. Here’s why. Deep dive analysis.

aNewDomain.net — A few weeks ago, when Amazon released its Fire TV media streamer at $99, the pricing surprised me. It seemed Fire TV should come in closer to Chromecast’s $35 price tag, or closer to the price of the Roku Streaming Stick, at $49.

But, as Amazon’s plans unfold, its pricing and overall strategy start making sense. Especially in light of the Amazon HBO deal.

Recent announcements clarify Amazon’s posture, a posture that emphasizes content as king. It turns out Amazon is charging a higher price for their streaming device so they can have the capital to invest in content. Amazon is now moving to match Netflix with the creation of its own original TV series.

While Amazon has yet to come up with shows as popular as Netflix’s House of Cards, its political satire Alpha House, starring John Goodman, enjoys excellent reviews and a strong following. And Amazon continues to invest in more unique content.

In light of all this, Amazon execs reveal they’ve struck a deal with the premium cable network HBO. This deal lets Amazon Prime subscribers watch HBO programs on the Internet without a subscription to cable TV. This is something that was previously unheard of.

Sources say that Amazon will pay HBO more than $300 million over three years for the rights to HBO shows.

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The shows include The SopranosThe WireSix Feet Under, Deadwood, Band of Brothers, Big Love, True Blood, Rome, John Adams, The Pacific, In Treatment and more. Previous seasons of such current shows as Girls and Veep won’t be available until around three years after they have first aired on TV.

The deal applies to Amazon Prime subscribers in the U.S.; in the UK, Sky owns the exclusive rights to many shows from HBO’s back catalog.

The first batch of HBO shows will be available to Prime subscribers on May 21, and the remainder will be rolled out fairly quickly. These are older shows, but they include many popular series. Not all shows will be represented. For example, Sex in the City and Game of Thrones are not included.

Yet, this is a boon to non-cable subscribers and also to cable subscribers who, like me, don’t want to pay the monthly premium for HBO content. In fact, at $99 a year — translation: $8.25 a month — joining Amazon Prime is the cheapest way to enjoy HBO content.

Those of us who have not subscribed to HBO in the past will have plenty of content to catch up on.

This move is a feather in Amazon’s cap, setting it apart from the crowd. Potentially, it helps Amazon with its main goal of entrenching people in its ecosystem. It also should help sales of the Fire TV. And, because HBO now is not available on Netflix, it could help establish Amazon’s video streaming service as a serious rival to Netflix.

Netflix has recently announced that it will increase prices by $1 or $2 a month from the current $7.99 a month price. Think about that. It makes Amazon Prime at $99 a year, or $8.25 a month, one of the cheapest streaming options.

With the free shipping and handling for Amazon Prime products, plus Kindle’s lending library and other perks, Amazon Prime just became a lot more enticing.

Yes, content is king. Amazon is making great inroads to move that content to the Internet. The Amazon HBO deal sounds like a simple move, but it stands to disrupt the content delivery business. Content delivery will, in my assessment, look extremely different as a result of all this within just a couple of years.

Stay tuned.

For aNewDomain, I’m Sandy Berger.

Based in Pinehurst, North Carolina, Sandy Berger is a veteran tech journalist and senior editor at aNewDomain.net covering tech tips and tricks, apps, gadgets, and consumer electronics. Email her at Sandy@aNewDomain.net. Follow her on Twitter @sandyberger+SandyBerger on Google+, and on Facebook.

About the author

Sandy Berger

Sandy Berger

Based in New Jersey, Sandy Berger is reviews editor for aNewDomain.