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The “streaming wars” are widely understood to be a clash of content titans fighting for a piece of consumers’ entertainment wallet. But behind the scenes, another intense business brawl is happening between streaming services and the industry’s two connected-TV heavyweights: Roku and Amazon.

WarnerMedia launched HBO Max in late May, and more than six weeks later, it’s still a no-show on Roku or Amazon’s Fire TV. Coming up is NBCUniversal’s July 15 national unveiling of Peacock, and it, too, is unlikely to be on either platform, sources say.

The standoffs, of course, revolve around money. More than that, the distribution disputes are about long-term strategic access to rapidly growing streaming-first audiences, as well as advertising inventory. One media company exec says Roku and Amazon are asking for “egregious” terms. On the other side, an insider at one of the over-the-top platform providers says they’re simply looking for “a reasonable share” of the value they create for partners — and adds that companies like WarnerMedia and NBCU are coming to the table with an “old TV mindset.”

The OTT platforms’ leverage is real. Both say they have more than 40 million active accounts (and growing). “Amazon and Roku are beginning to play hardball with a lot of these services,” says Parks Associates analyst Kristen Hanich. “They’re a lot more powerful than they were three years ago.”

The blackouts are akin to TV networks’ feuds with cable and satellite operators. And many in the industry expect them to continue.

For WarnerMedia, the absence of HBO Max on Roku and Fire TV has caused confusion and likely stunted signups. The AT&T-owned company’s plan was to convert legacy HBO to HBO Max for the same $14.99 monthly price, on the theory that the bigger content bucket will lure new customers.

But the impasse with Roku and Amazon has thrown a wrench into that. Warner­Media’s HBO Now app deal for Fire TV expires July 31, sources familiar with the wrangling tell Variety. So unless the sides can agree on an HBO Max pact before then, Fire TV users will no longer have access to an HBO app (but they will be able to stream HBO content on the devices through Prime Video). Roku has a deal to keep an “HBO” app, which is replacing HBO Now as of Aug. 1, while talks over HBO Max continue.

A central sticking point: WarnerMedia wants to remove HBO from Amazon’s Prime Video Channels and the Roku Channel. That’s so the media conglomerate can keep customers within the HBO Max app experience, giving it the ability to gather data for recommendations and (down the road) ad targeting.



Apple, which offers the HBO Max app, agreed to stop selling HBO through Apple TV Channels. But Amazon and Roku are resisting.

“They want to aggregate all this content into a central experience,” says an industry exec familiar with the talks. “But Netflix is never going to do that. Hulu is never going to do that. HBO did that early on, and now Amazon and Roku have a real problem because if HBO is not in their channels that model falls apart.”

Indeed, the channel-aggregation biz has become lucrative for Roku and Amazon. According to Amazon, almost 5 million HBO subscribers access the service through Prime Video Channels. Overall, nearly one-third of U.S. consumers who subscribed to a streaming service in the past 12 months used aggregation services on Amazon, Roku and Apple, according to a Parks Associates study conducted in Q1.

In a statement, WarnerMedia said, “We look forward to reaching agreements with the few outstanding distribution partners left [for HBO Max], including with Amazon and on par with how they provide customers access to Netflix, Disney Plus and Hulu on Fire devices.”

Meanwhile, Peacock chief Matt Strauss tells Variety, “We are certainly engaged in discussions with every platform,” and says NBCU is open to various forms of “value exchange” in such deals.

For the streaming services, the problem isn’t revenue sharing per se. (Roku takes a standard 20% cut of subscription fees, while Amazon’s take is believed to range from 15%-45%.) Apple and Google slice off a comparable piece of the subscription dollars that flow through their platforms.

The issues are the extras Roku and Amazon want thrown in, including ad inventory (Roku’s standard ask is 30%), rights to resell services in their channel stores and “free content” for the ad-supported Roku Channel and IMDb TV. Roku also asks for a marketing-spend commitment from partners, which among other things grants their channels preferred placement on the menu. (Roku and Amazon declined to comment on specific negotiating points.)

Roku and Amazon are arguably a duopoly, says a media exec: “It’s the classic ‘Get everybody on the platform’ and then change the game.”

The companies in these disputes understand that app blackouts are frustrating for their respective consumers. But, as one OTT platform exec puts it, “We’re not going to do a bad deal just to get a new streaming service on the platform.”

Andrew McCollum, CEO of low-cost TV streaming provider Philo, acknowledges there are inevitable disagreements about economic terms with platforms. “I think it’s going to be more adversarial over time,” he says. Like cable and satellite TV companies before them, platforms like Roku, Fire TV and Apple TV are becoming increasingly powerful gatekeepers.

Says McCollum, “‘Direct to consumer’ is a bit of a myth.”