x
Cable/Video

Top OTT platforms bottlenecking the streaming market – AT&T CEO

Streaming platforms operated by market leaders such as Roku and Amazon wield too much power over content distribution as viewers continue to migrate to OTT, AT&T CEO John Stankey claimed Monday at The Wall Street Journal's annual Tech Live event.

Much of Stankey's frustration stems from the May 27 national launch of HBO Max, which has struggled to lock in critical distribution on Roku players and integrated Roku TVs and Amazon Fire TV devices that represent the bulk of the retail streaming platform market.

HBO Max currently is not supported on Roku and Fire TV devices, but is available on iOS and Android mobile devices, Android TV, via Chromecast adapters, web browsers, Playstation 4 and Xbox One consoles, and Samsung smart TVs (2016 or later models).
HBO Max currently is not supported on Roku and Fire TV devices, but is available on iOS and Android mobile devices, Android TV, via Chromecast adapters, web browsers, Playstation 4 and Xbox One consoles, and Samsung smart TVs (2016 or later models).

While HBO Max currently is not offered on those platforms, Peacock, the new streaming service from NBCUniversal, notched a deal with Roku last month following weeks of heated negotiations that, according to industry sources, bogged down over an ad-related standoff. Another high profile tiff earlier this year, a temporary impasse between Fox and Roku, almost curtailed the streaming options for Super Bowl LIV before a deal was hammered out at the last minute.

HBO Max is currently offered as a premium, ad-free service as a standalone OTT offering or through distribution pacts with several US pay-TV providers. HBO Max is expected to add a less expensive, ad-supported tier sometime in 2021.

The new gatekeepers

Stankey argued that streaming platforms, rather than ISPs, have emerged as the content gatekeepers as they acquire more and more control and influence over the market as premium content continues to shift to direct-to-consumer, Internet distribution.

"Where the bottlenecks are sometimes occurring are in these commercial agreements" with streaming platforms, Stankey said. "We should ask ourselves – is that friction somebody really feeling their oats and maybe having market power above and beyond what's reasonable for innovation?"

This shift in the marketplace is also taking place amid the decline of the traditional pay-TV business and decisions by major studios to amplify their focus and resources on streaming. While HBO Max is now a centerpiece for AT&T's WarnerMedia group, two other media giants – The Walt Disney Company and ViacomCBS – have reorganized and reshuffled to emphasize their respective direct-to-consumer strategies.

An initial focus of HBO Max is to convert existing HBO subs to the new service. HBO Max had about 4.1 million subs by the end of Q2 2020, with only a fraction coming in as standalone subs. So the lack of access to Roku and Fire TV subs certainly isn't helping HBO Max to grow the direct-to-consumer portion of its base. AT&T reports Q3 results on Thursday, October 22.

Despite that, HBO Max is "ahead on subscriber counts," according to Stankey. "We have done exactly what we said we were going to do." WarnerMedia has set a goal for HBO Max to have 75 million to 90 million subs worldwide, including 50 million in the US, by 2025.

Stankey didn't comment on rumors that AT&T is looking to unload its struggling DirecTV assets or its Xandr advanced ad unit. The New York Post reported last week that the US Department of Justice has put the kibosh on a potential merger of DirecTV and Dish Network, at least until 5G services are expanded more broadly into rural markets.

Related posts:

— Jeff Baumgartner, Senior Editor, Light Reading

Be the first to post a comment regarding this story.
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE