T AT&T Inc

By Patience Haggin 

Roku Inc. reached a deal with AT&T Inc.'s WarnerMedia to carry the HBO Max streaming service on Wednesday, ending an eight month standoff between the companies and ensuring that Roku customers will be able to watch content such as the upcoming "Wonder Woman" movie.

The two companies were at loggerheads since HBO Max was launched in May over the financial terms for Roku to carry the app. The stakes were raised for both sides when WarnerMedia said the highly anticipated movie "Wonder Woman 1984" would be released simultaneously in theaters and on HBO Max on Christmas Day.

The agreement significantly expands the potential audience for the WarnerMedia movie. Roku is the leading streaming app distributor in the U.S., with some 46 million active accounts and 38% of the market including set-top devices and software that powers smart TVs.

Spokesmen for both companies declined to comment on the terms of the deal.

WarnerMedia has said its full slate of films for 2021 will be launched the same way as "Wonder Woman," with availability on HBO Max in the U.S. alongside the theatrical release. The company hopes that such premium programming will generate a wave of subscriptions for the streaming service, which is battling Netflix Inc., Walt Disney Co.'s Disney+, Comcast Corp.'s Peacock, and several other services.

The standoff with HBO Max is one of several Roku has had with media companies. Its biggest rival in streaming-media distribution, Amazon.com Inc., also has had tense negotiations with some companies over carrying their apps in its FireTV devices. WarnerMedia reached a deal to place HBO Max on FireTV in November.

Roku makes money selling its devices, but also generates substantial revenue through its deals with content providers. When companies get their apps carried by Roku, they generally agree to supply a share of subscription revenue and advertising space.

WarnerMedia and Roku differed over how to split ad space in an upcoming ad-supported version of HBO Max, people familiar with the talks said. WarnerMedia took a hard line in the talks against supplying content to The Roku Channel, an ad-supported video app owned by Roku, one of the people said.

It is unclear how the two sides resolved those conflicts. A Roku spokesman declined to say whether WarnerMedia shared any content for the Roku Channel.

Standoffs such as the one between HBO Max and WarnerMedia are becoming a regular occurrence in TV's streaming era. They are reminiscent of negotiations in the cable-TV world, when distributors pay carriage fees to networks. For years, cable channels and providers have quarreled over those terms, sometimes leaving cable customers without access to programming.

Roku had a similar dispute with Fox Corp. over carriage of its apps that nearly left Roku users without access to the Feb. 2 Super Bowl. A long standoff with Comcast Corp.'s NBCUniversal over carrying Peacock nearly pushed Roku to drop dozens of NBCUniversal apps from its channel store in September. This month Roku blocked new downloads of Spectrum, an app for customers of Charter Communications Inc., after a carriage contract between the two companies expired.

Write to Patience Haggin at patience.haggin@wsj.com

(END) Dow Jones Newswires

December 16, 2020 17:09 ET (22:09 GMT)

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