By Martin Peers and Greg Bensinger
Time Warner Inc.'s HBO agreed to license older episodes of its
programming library to Amazon.com Inc's Prime membership streaming
service, the first time the premium cable channel has struck such a
deal with an online video provider.
The deal means that most past HBO shows such as "The Sopranos,"
and "The Wire" will be available online for streaming without a
separate fee. Until now, HBO has made its library of shows
available for digital purchase, such as through Amazon and Apple
Inc.'s iTunes service, and through DVD rental services including
Netflix Inc., but not through online streaming services.
The agreement, which goes into effect next month, is significant
for Amazon Prime, bolstering its library of past content. Amazon
has been seeking to boost its Prime offerings after raising the
price in March of the unlimited shipping and streaming video
service by $20, or 25%, annually.
HBO's agreement is exclusive, which means HBO can't strike a
similar deal with a streaming service such as Netflix or Hulu.
Terms of the deal, including its length, weren't disclosed.
The deal is carefully structured to ensure it doesn't erode
subscriber demand for HBO. Shows won't become available on Amazon
Prime Instant Video for three years from HBO's original broadcast.
That means the first season of "Girls" will be available next year,
for instance. Also "Game of Thrones," HBO's big hit at the moment,
isn't included.
Also excluded are "Sex and the City," "Entourage" and "Curb Your
Enthusiasm" because of syndication deals HBO has previously struck
with other outlets.
As part of the deal, HBO Go will be available on Amazon's new
set-top streaming device, Fire TV. The app already is available on
other such devices, such as Apple TV.
Amazon cited rising content acquisition costs, as well as higher
shipping fees, for the Prime fee bump, the first such increase in
the program's nine-year history. The Seattle-based company has been
working to bolster Prime, including with a possible streaming music
service and new merchandise that would be eligible for two-day
shipping.
The Prime program is one of Amazon's chief competitive
advantages because its members tend to keep spending with Amazon,
rather than with competitive retailers. By some estimates Prime
members may spend more than twice as much than non-Prime members
using Amazon.
Netflix said Monday that it is planning a $1 or $2 increase to
its monthly $8 membership fee, meaning Amazon will once again
become a cheaper streaming video alternative.
Write to Martin Peers at martin.peers@wsj.com and Greg Bensinger
at greg.bensinger@wsj.com
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