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Charter cuts deal to distribute HBO Max

Charter Communications is the first major US cable operator to announce a deal to distribute HBO Max, the new streaming video service from AT&T's WarnerMedia that's set to debut next month and start at $14.99 per month.

Under the new multiyear deal, Charter's existing HBO subs, including those on the MSO's Spectrum Silver and Gold video packages, will be auto-converted to HBO Max for no added charge. Other Charter customers will also have the option to get HBO Max. Financial terms were not announced, but it's expected that Charter will get a piece of HBO Max's subscription revenues.

Set to launch sometime in May, HBO Max will start at $14.99 and feature about 10,000 hours of content.
Set to launch sometime in May, HBO Max will start at $14.99 and feature about 10,000 hours of content.

The Charter deal to distribute HBO Max comes on the heels of a similar one that WarnerMedia struck with YouTube TV.

At launch, HBO Max will feature about 10,000 hours of library content and basically double the amount of content delivered on the legacy HBO service. WarnerMedia has set a goal for HBO Max to bring in 75 million to 90 million subs worldwide (including 50 million in the US) by 2025. Charter ended 2019 with 15.62 million video subs, but doesn't break out how many get HBO.

Why this matters
A deal with Charter is a clear indicator that WarnerMedia is making progress with its plan to sell HBO Max through pay-TV partners and convert HBO customers to the new service. That strategy will play alongside WarnerMedia's plan to sell HBO Max as a standalone subscription streaming service to consumers who don't get pay-TV.

AT&T and WarnerMedia have also made it clear that they intend to strike a number of distribution deals for HBO Max prior to its May launch. However, some pay-TV providers have been hesitant about doing a deal because of concerns that HBO Max, which will also be marketed as a standalone, direct-to-consumer offering, could accelerate cord-cutting.

The new deal also squares with an evolving video model at Charter in which the MSO's new deals accommodate distribution of new Internet-delivered streaming services. Charter's new deal with Disney, for example, contemplates potential carriage of Disney-owned Hulu, ESPN+ and the new Disney+ streaming service.

The HBO Max carriage agreement could also signal that Charter could sign a similar pact with NBCUniversal for Peacock, the streaming service that is set to launch nationally on July 15 following an early preview for Comcast X1 and Flex customers.

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— Jeff Baumgartner, Senior Editor, Light Reading

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