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The Glaring Hole in HBO Max: It's Missing From Both Roku and Fire TV. Here's Why.

HBO Max, the streaming service launched by AT&T's (NYSE: T) WarnerMedia, made its debut on Wednesday. The service, which is anchored by content from its namesake HBO, went live packing a $14.99 monthly price tag and a host of flagship programming.

Unfortunately, even with more than a dozen distribution deals in place, there was a glaring hole in its launch strategy that put a damper on the festivities: Viewers using Amazon.com's (NASDAQ: AMZN) Fire TV or a Roku (NASDAQ: ROKU) device are unable to access the service.

Image source: HBO Max.

That amounts to as many as 80 million streaming households in the U.S., frustrating the multitude of customers who use these platforms.

These omissions represents a rather sizable gap in HBO Max's reach. Roku announced earlier this month that its active accounts grew to 39.8 million to close out the first quarter, a number that it updates every quarter. For its part, Amazon revealed in January that it ended 2019 with more than 40 million active users, a number that the company updates only occasionally. In each case, however, the viewer count has no doubt grown since the companies' respective announcements.

To further complicate the matter, both Roku's platform and Fire TV allow viewers to access HBO, and even subscribe to the service. An estimated 5 million current HBO subscribers access the premium cable service via Amazon's Prime Video Channels.

So what's causing the launch-day dispute between HBO Max and the folks at Roku and Amazon?

Apparently the principals involved failed to come to an acceptable agreement regarding revenue sharing, an increasingly common battle that all too often plays out in the headlines. AT&T's incoming chief, John Stankey, tried to spin the issue in his favor, saying, "We must be doing something right," suggesting the service was a threat to Roku and Fire TV's businesses.

A last-minute deal with Comcast this morning suggests additional deals could be reached any day.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Amazon and Roku. The Motley Fool owns shares of and recommends Amazon and Roku. The Motley Fool recommends Comcast and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.


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