HBO to Allow Amazon to Stream Older Shows--Update

By Martin Peers and Greg Bensinger 

Time Warner Inc.'s HBO agreed to license older episodes of its programming library to Amazon.com Inc's Prime membership streaming service, the first time the premium cable channel has struck such a deal with an online video provider.

The deal means that most past HBO shows such as "The Sopranos," and "The Wire" will be available online for streaming without a separate fee. Until now, HBO has made its library of shows available for digital purchase, such as through Amazon and Apple Inc.'s iTunes service, and through DVD rental services including Netflix Inc., but not through online streaming services.

The agreement, which goes into effect next month, is significant for Amazon Prime, bolstering its library of past content. Amazon has been seeking to boost its Prime offerings after raising the price in March of the unlimited shipping and streaming video service by $20, or 25%, annually.

HBO's agreement is exclusive, which means HBO can't strike a similar deal with a streaming service such as Netflix or Hulu.

Terms of the deal, including its length, weren't disclosed.

The deal is carefully structured to ensure it doesn't erode subscriber demand for HBO. Shows won't become available on Amazon Prime Instant Video for three years from HBO's original broadcast. That means the first season of "Girls" will be available next year, for instance. Also "Game of Thrones," HBO's big hit at the moment, isn't included.

Also excluded are "Sex and the City," "Entourage" and "Curb Your Enthusiasm" because of syndication deals HBO has previously struck with other outlets.

As part of the deal, HBO Go will be available on Amazon's new set-top streaming device, Fire TV. The app already is available on other such devices, such as Apple TV.

Amazon cited rising content acquisition costs, as well as higher shipping fees, for the Prime fee bump, the first such increase in the program's nine-year history. The Seattle-based company has been working to bolster Prime, including with a possible streaming music service and new merchandise that would be eligible for two-day shipping.

The Prime program is one of Amazon's chief competitive advantages because its members tend to keep spending with Amazon, rather than with competitive retailers. By some estimates Prime members may spend more than twice as much than non-Prime members using Amazon.

Netflix said Monday that it is planning a $1 or $2 increase to its monthly $8 membership fee, meaning Amazon will once again become a cheaper streaming video alternative.

Write to Martin Peers at [e-mail] and Greg Bensinger at [e-mail]

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