Market Insight

HBO licenses content to Amazon Prime Video in Japan

February 05, 2018

Jun Wen Woo Jun Wen Woo Senior Research Analyst, Online Video

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HBO signed a content deal with Amazon in January 2018 to license 50 HBO series on Amazon Prime Video in Japan. Existing Prime subscribers will be able to watch HBO shows, including Game of ThronesSilicon ValleyThe Sopranos and The Wire, without having to pay an additional fee. HBO content will be available on Amazon Prime Video in Japan starting April 1, 2018. Details on the duration of the deal are undisclosed.

Our analysis

Partnership with HBO will strengthen Amazon’s position in Japan

Japan is one of the few markets with more Amazon Prime Video subscribers than Netflix subscribers by the end of 2017. IHS Markit attributes the success of Prime Video to the service’s perceived offer of free content, whereby video content was added on top of their existing Prime subscriptions without an additional charge.

Amazon’s content deal with HBO will bolster the attractiveness of the  Prime Video service to users and enhance its competitiveness in the crowded Japanese online video market. HBO titles including Game of ThronesTrue Detective, and Big Little Lies are currently available to buy or rent on the Prime Video service. These titles will be included with an Amazon Prime subscription at no extra charge from April 2018.

Content partnerships to become HBO’s main strategy in Asia

HBO launched its HBO Go service in Hong Kong and Singapore during 2015 as a standalone service, while in the Philippines the company launched  exclusively on SKY’s cable TV and broadband services. HBO also has other content partnerships with local pay TV operators or streaming services in Asia. However, these standalone services have struggled to gain subscribers due to a lack of local content and strong competition from other local and international online video services in the region.

HBO’s partnership with Amazon Prime Video in Japan indicates that the US-based network is now focussed on content partnerships to distribute its content in Japan where localisation is of great importance. Local content plays a pivotal role in Japan as was demonstrated by Hulu’s initial failure in the country. Therefore, HBO’s preference is to license its content rather than direct distribution to consumers.  Learning from Hulu’s initial low uptake, Netflix and Amazon have inked a number of local deals and original content to attract a wider audience in the region.

International service providers challenge local players in Japan

HBO previously had an exclusive deal with Hulu Japan that started in February 2016. IHS Markit estimates Hulu Japan subscribers were fewer than 2 million in 2017 compared with 2.3 million subscribers to the Amazon Prime Video service.

The growth of online video in Japan remains slow compared to other developed countries, despite the fast growth of broadband infrastructure and smartphone adoption, Netflix launched its service in early September 2015 while Amazon, which has maintained a market presence since 2005, started offering its video service in late September 2015. The entrance of international services like Netflix, Amazon Prime Video and DAZN, a sports channel from Perform Group, has posed challenges to local players in the market such as Hulu Japan, U-NEXT, dTV, GYAO and Tsutaya TV. The impact was even greater for UULA and Bonobo that were discontinued in 2017 whilst BBTV Next also ceased operation in January 2018.

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