HBO now facing pressure to expand its streaming service or risk getting left behind.
Amazon Prime Video:
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It took a little longer than some expected, but Amazon Prime Video is now live in 200 countries. The online retailing giant finally pulled the trigger Wednesday morning, following up on a promise made a month ago on Twitter by British TV personality Jeremy Clarkson.
The launch is great news for consumers and streaming fans, who now have a well-resourced and high-quality alternative to Netflix to choose from.
Like Netflix, Amazon has its sights set on global domination and is spending billions on original content to get there. That content, which includes shows such as Transparent and The Grand Tour, is also similarly winning acclaim from critics and viewers alike.
The expansion sets up a new world order in TV, with the two companies now the main global forces in home video entertainment. Netflix is available in 190 countries.
The clear losers in this new paradigm will be cable companies and, unless something changes, HBO.
Outside of the United States, HBO has for the most part opted to maintain the old order by licensing its content to cable providers. In some cases, as in Canada, that has included ceding streaming rights to those local players.
In the U.S., the network operates its own standalone subscription streaming service, HBO Now, that competes with both Amazon and Netflix, as well as Hulu.
Without a major push of HBO Now into more countries – and soon – HBO risks being relegated to number three in this new global streaming order, despite possessing highly sought-after content including Game of Thrones and Westworld.
This isn’t something to be taken lightly. As we’ve seen countless times, it’s inordinately difficult for a company to catch up in online services once it has fallen behind. Just ask Google about Facebook or any of Amazon’s e-commerce competitors.
HBO’s risky alternative is to continue allowing local cable providers to determine how to stream its content to viewers, which is the arrangement it has in Canada with Bell until at least 2020, according to estimates.
Does HBO want to entrust its future to a disparate group of locally minded cable companies that aren’t necessarily willing or able to adapt to technological realities? The Vegas odds on that have to be pretty low.
It’s difficult to envision a future for cable providers in this new world order. The availability of Amazon Prime Video is likely to accelerate cord cutting even more, as would an expansion of HBO Now.
It’s also hard to see much of a future for local streaming services, such as Bell’s CraveTV in Canada, which is largely dependent on HBO for its content.
HBO could ultimately decide to raise the cost of its content to Bell, while Bell has little power over what it can charge customers given that Netflix and now Amazon are setting the pricing bar.
Sooner or later, something is going to have to give, which is what happened to Shomi, Rogers’ and Shaw’s joint streaming venture. The two companies likely saw the new world order coming and decided against trying to compete with it, so they shuttered Shomi last month.
On the pricing front, Amazon is being aggressive. Canadians who subscribe to the Amazon Prime expedited shipping service get video at no extra cost, while customers in new countries can sign up for a low introductory price of $2.99 (U.S.) or €2.99, then $5.99 after.
It’s an interesting approach given that CraveTV costs $7.99 (Canadian), while Shomi cost $8.99. Unlike the cable providers, Amazon appears to understand that it can’t charge close to what Netflix does since its catalog isn’t nearly as deep and its service isn’t as robust.
I’ve said it before, but it bears repeating: the future of television is global and will belong to Netflix and Amazon and, if it gets into the proper gear, HBO. We’re entering the final days of cable, with the likes of CraveTV and Shomi the last gasps of the old-paradigm providers.