Here’s Why Roku And HBO Max Are Apparently Still At Odds Over A Streaming Deal

Much to the chagrin of movie theater enthusiasts, HBO Max got a lot more valuable to cinephiles last week when Warner Bros. announced that its entire 2021 slate of movies would premiere on the streaming app the same day they hit theaters. But the news was especially cruel to some streaming enthusiasts, mainly those that rely on Roku to get their digital media in this fragmented streaming marketplace.

The lack of an HBO Max app on Roku devices, including smart TVs, has been a sticking point for both owners of said devices and those at Warner who want to see the platform grow. Without a true app on Roku, only a screen mirroring trick or maybe using Apple AirPlay on certain devices served as a proper workaround. Unless you, of course, have another device hooked up like a gaming console or an Amazon FireTV device, which officially added HBO Max in late November.

And despite the glut of big releases soon to hit HBO Max, it doesn’t seem like either side is ready to budge on this stalemate just yet. As Variety laid out earlier in the week, even the kind of application HBO Max would be on Roku is up in the air right now.

Sources confirm to Variety that WarnerMedia and Roku are in active talks. But both sides have signaled that they are unwilling to budge on their positions: Roku wants to keep HBO/HBO Max as a channel it can sell directly to its own customers, while WarnerMedia is insisting that HBO Max be available as a standalone app. The companies are also hashing out the terms for how they will divvy up ad inventory for the ad-subsidized version of HBO Max, which WarnerMedia plans to launch for a reduced price later in 2021.

In other words, things are tied up in quite literally what kind of access to HBO Max would be allowed on Roku, let alone where the money goes from that app or channel if it existed. And neither side seems intent to make a deal despite the additional pressure that will come, starting on Christmas Day, when Warner Bros. movies start hitting HBO Max. As Variety laid out, Warner’s general thesis is that the pressure is on Roku as Christmas is often a time people buy streaming hardware, and not necessarily subscriptions, as gifts. Meanwhile, Roku feels its large user base is incentive enough for HBO Max, which now needs to see its subscriber base grow to make up the billions it’s likely to lose by surrendering big box office returns in 2021.

As a result, HBO Max’s annual average subscriber base would need to be 8.4 million higher than its current pace of additions for WarnerMedia to make itself whole, according to Moffett. “The market has shown a clear preference for go-big-or-go-home digital strategies,” he wrote in a research note Friday. “The most obvious takeaway from yesterday’s news is that AT&T is, come hell or high water, going to drive traffic to HBO Max.”

And Roku, boosted by the COVID pandemic, has seen significant momentum. The company will close out 2020 with an estimated 52 million user accounts — with have a footprint representing around 40% of all U.S. broadband households, according to Rosenblatt Securities.

The deal that got HBO Max on Amazon devices, it should be noted, meant that Amazon could no longer sell HBO subscriptions through its Prime Video Channels. That’s essentially what Roku wants to do with HBO Max, as its research claims channels sold through that tend to get more customer usage than those presented simply as apps. That’s likely because, well, people want to justify their purchases with use, which just so happens to play into Roku’s desire to sell HBO Max as a channel and then tap into ad revenue.

The easy solution for frustrated streaming subscribers is, of course, the most inconvenient one: to have multiple options for streaming content and just be willing to switch HDMI inputs or navigate your way to blockbuster movies with a gaming controller. But as is often the case with these things, it’s just another inconvenience for the people doing their best to stay entertained while they’re stuck at home during a public health crisis.

[via Variety]