Roku and WarnerMedia signed a contract for the distribution of exclusive HBO Max shows and movies on the Roku Devices starting from 17 December. Roku.inc shares have gained almost 4.5% after the deal.
HBO Max will be live on Roku starting tomorrow, the companies reported on Thursday, December 17. The contract provides distribution of the subscription channel on all big over-the-top networks. Its exclusion from Roku was a major hole: as of the end of September, Roku had 46 million active user accounts.
The terms of the resolution were not disclosed, but both parties argued that they were able to eventually settle their differences.
Ahead of the Dec. 25 day-and-date premiere of “Wonder Woman 1984” starring Gal Gadot on both HBO Max and in theaters, WarnerMedia was aiming to tie down an HBO Max deal with Roku as the service’s last major distribution partner. Meanwhile as previously reported, all movies in the 2021 lineup of Warner Bros. will premiere on HBO Max in the U.S. simultaneously with its theatrical release and will be available for one month exclusively for streaming.
Under the arrangement, Roku users who have already subscribed to HBO Max via Roku will immediately have the original HBO app upgraded to the HBO Max app on their smartphones, and they will be able to log in using their existing HBO credentials.
It seems like Roku will no longer be able to market HBO as a channel rental at the Roku Channel store in the future, close to the compromises reached by both Amazon and Apple in their HBO Max agreements. Using Roku Pay, the payment service for its streaming devices, Roku can offer HBO Max subscriptions.
After the HBO Max deal was revealed, Roku’s shares were up over 3 percent in after-hours trading.
We agree that all content will be downloaded, and we are delighted to work with HBO Max to carry their amazing catalog of popular entertainment brands and blockbuster slate of direct-to-stream theatrical releases to Roku households with more than 100 million individuals who have made Roku America’s No. 1 TV streaming network,” said Scott Rosenberg, SVP of Roku inc.
Rosenberg said, “Reaching mutually beneficial agreements where Roku grows with our partners is how we provide consumers with an outstanding user experience at an incredible value, and we are excited about the chance to deepen our long-standing relationship with the WarnerMedia team.”
“Tony Goncalves, chief revenue officer at WarnerMedia, alluding to the controversial Warner Bros. film release strategy, said in a statement, “We are breaking new ground in the months ahead, and we can’t wait to collaborate with our long-time partners at Roku to draw on our previous accomplishments and deliver the best-in-class premium entertainment of HBO Max to the large and deeply engaged audience of Roku.
News of the WarnerMedia-Roku deal comes a day after Comcast announced the availability of the HBO Max app on Xfinity X1 and Xfinity Flex, although it was also released earlier today on PlayStation 5. After holding out for several months and eventually promising to avoid distributing HBO on Amazon Prime Video Networks, Amazon clinched a contract in November to distribute HBO Max on Fire TV and Fire Tablet computers.
Roku and WarnerMedia had been haggling over terms long before HBO Max released in late May. Although WarnerMedia insisted on selling HBO Max as a standalone app, Roku wished to continue to be able to sell HBO via the Roku Channel shop. Moreover, for the private, ad-supported Roku Channel, Roku requested the rights to a range of HBO Max content, but that is not part of the final contract. The two sides have attempted to negotiate an understanding about how the promotional inventory will be shared with Roku for the HBO Max ad-supported, reduced-price version expected to be launched in late 2021.
Roku played hardball in talks with both HBO Max and NBCUniversal’s Peacock this past year. That’s because unlike the other major OTT web companies (Amazon, Google and Apple), Roku depends fully on revenue generated to support its business model from partner content and services. For content partners, Roku’s regular contract terms are 20% of subscription costs and 30% of ad inventory. In Peacock’s case, since the NBCU streamer bears a lighter ad load than other AVOD providers, the ad split was a non-starter because Roku and NBCU worked out an agreement in September.
Roku users can install the latest HBO Max channel beginning Dec. 17 by searching for it or finding it in the Roku channel store’s “New and Notable” and “Movies & TV” sections.
HBO Max, which has a $14.99 per month normal subscription fee, touts 10,000 hours of selected premium content. “It includes the entire original catalog of HBO (with episodes including The Sopranos,” “Game of Thrones” and “Lovecraft Country”) as well as Warner Bros., DC, Cartoon Network, Adult Swim, and Turner Classic Movies TV shows and movies. With the whole “Gossip Girl” library arriving next month, HBO Max is stocked with every episode of popular TV shows like “Friends,” “The Fresh Prince of Bel-Air” and The Big Bang Theory.”
In addition to the Christmas Day release of “Wonder Woman 1984,” this month HBO Max presents Carrie Underwood’s exclusive holiday special “My Gift: A Christmas Special,” a new “Euphoria” special episode starring Zendaya, Steven Soderbergh’s comedy film “Let Them All Talk,” and “Heaven’s Gate: The Cult of Cults.”
“The January programming highlights of HBO Max include the second special episode of “Euphoria”; “Quest Team” Season 4; “Selena + Chef” new season; “Snowpiercer” Season 1; “The Alienist: Angel of Darkness”; and The King of Staten Island.