How much is Amazon paying to get its hands on HBO’s old shows?
HBO’s Amazon Haul Is Big -- But Not as Big as You Might Think
HBO will get more than $300 million over the course of a three-year deal with Amazon.
Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
A lot! But less than some people might have thought.
Jeff Bezos’s company will pay HBO more than $300 million over the course of the three-year term, according to multiple people familiar with the deal.
That’s a big sum for Amazon, but also very doable: The retailer generated sales of $75 billion last year, and is thought to be spending at least $1 billion a year to build up its streaming video catalog.
That money is also very nice for HBO, since selling repeats on the Web is a very high-margin operation. But HBO was already doing very well: Last year it generated operating income of $1.7 billion on revenue of $4.9 billion.
The fact that HBO isn’t getting more for its old shows, like “The Sopranos,” helps underscore the idea that HBO isn’t radically changing its model by selling them to Amazon.
Yes, selling its old shows to an online subscription service is a new thing for HBO. But it’s a thing that is supposed to keep its existing business intact by keeping its new shows locked down for three years. And it is keeping its most popular show — “Game of Thrones” — out of Amazon’s streaming service altogether.
This article originally appeared on Recode.net.
