Why Amazon Should Buy HBO from Time Warner


I was just thinking about how Amazon’s goal is to subsidize their new Kindle Fire by selling content – in particular video content, which can then be streamed using their Amazon Prime “Netflix-like” service.

In fact, on Monday Amazon said its online streaming service will offer Fox movies and television shows under a new content deal, so Amazon seems to be expanding their content licensing portfolio.

netflix-logo.jpgHowever, Amazon is at the mercy of whatever the content providers charge for TV shows and movies. Netflix has inked some deals with several Hollywood studios due the strength of their membership base. Amazon can follow Netflix’s model and continue to license content or I posit that Amazon should follow the HBO model and create their own content.

I grew up in the 1970s and 1980s when HBO took off. They offered movies that became available on HBO before your local video rental store had it. However, their advantage diminished as the time window HBO (and later Showtime) offered movies before rental companies and blockbuster-logo.jpgpay-per-view got shorter and shorter. I stopped subscribing to HBO long ago due to the DVD revolution (Blockbuster) and later Netflix. There just wasn’t enough unique content and I didn’t care for boxing matches, stand-up comedy, and concert specials that rounded out HBO’s unique content portfolio.

Then HBO did something smart and created made-for-cable movies, children’s shows, and documentaries. Shows like Fraggle Rock, Tales from the Crypt gave HBO subscribers something unique they were willing to game-of-thrones-dvd-cover.jpgpay for. More recently, shows like The Sopranos, Sex in the City, True Blood, and my current favorite Game of Thrones rekindles my love affair with HBO. HBO is no longer at the mercy of the movie studios to provide them content which subscribers are increasingly finding elsewhere (Netflix, Redbox, etc.).

Perhaps it’s early in the game for Amazon to start considering “creating” content, but remember the golden rule – “Content is King”. Look no further than the Cablevision vs. Fox fiasco where Cablevision subscribers endured a lengthy period of time with no Fox content. Amazon needs to be in control of their own destiny. Just look at how Netflix recently bought exclusivity rights to DreamWorks Animation. Amazon better hurry before Netflix “locks up” exclusivity contracts that don’t expire for years, thus closing the window of opportunity for Amazon.

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