HBO on Amazon Prime Exposes Weakness At Netflix

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NEW YORK ( TheStreet) -- The media has lost its ability to think for itself. Something happens -- whatever it is -- and intuition immediately fuels tweet after tweet and story after story of echo chamber regurgitation.

It's groupthink at its worst.

Almost to the person you get the same stale -- for want of a better word -- opinion on everything. Case in point -- the deal that brings select three-year old Home Box Office (HBO) (a division of Time Warner ) programming to Amazon.com Prime customers.

Here's what matters:

  • The addition of some HBO programming makes Amazon Prime more attractive. Obviously. But you can say this about dozens of other improvements Amazon constantly makes to its ecosystem. 
  • The deal highlights the fragility of Netflix's business model. It also underscores what a horrible CEO -- despite his smoke and mirrors and seductive way with the media -- Reed Hastings is. Had he approached competition with HBO differently (e.g., with some humility), he might be getting this deal rather than Amazon. There's no question in my mind he would love to have it.
  • Expect more of this type of thing from HBO. They're in the early stages of what will be/is a move fast when necessary, ever-evolving digital strategy.

And, as per a popular talking point, more "young people" will be exposed to HBO programming, thus -- so the theory goes -- motivating them to find a way to catch the network's current slate. Because, of course, that's what most "young people" do these days -- clamor for ways to watch "The Wire" through their Amazon Prime account.

Another thing I'm hearing ...

The HBO/Amazon hookup angers cable . Um. No. In fact, it's pretty much the polar opposite. If indeed watching old -- and not even completely top tier -- HBO programming via Amazon intrigues people, cable companies could stand to benefit. But, that aside, they already are benefiting in a big way.

If you watch television at all, you may have noticed an uptick in the number of commercials selling you on cable with HBO as the main hook. Here in Southern California, Time Warner Cable's  is pushing them hard. I watch stations in Comcast markets (during baseball and hockey telecasts) and see the same. However, I cannot attest to the frequency outside of my home market.

In any event, cable realizes now more than ever that HBO is a way to sell people. It's not something to hide as a cost. Rather it's a valuable benefit made even more attractive by the emergence of HBO GO and smash hit originals such as "Game of Thrones" and "True Detective." (And, unlike Netflix, HBO has and reports the numbers to support the "smash hit" claim).