Shares of Roku (NASDAQ:ROKU) were going up today after a report surfaced that it's close to a deal with AT&T (NYSE:T) to bring its HBO Max channel to Roku's platform. As of 11:00 a.m. EST Thursday, Roku stock was up 6%. AT&T stock, by contrast, was down slightly, demonstrating investors believe this news is a bigger deal for Roku than for AT&T.
The report of Roku's potential deal with AT&T is exclusive to members of The Desk, but the headline alone is enough to excite investors. Of the major streaming-video services out there, HBO Max is considered the biggest fish left to land for Roku. The company already secured the other outstanding big service with its recent deal to bring Comcast's Peacock channel to the platform.
Here's the potential motivation for both sides to get this deal done. For Roku, it wants to have all streaming-video channels on its platform so users can watch anything they want, whether free services or subscriptions. For AT&T, it wants lots of subscribers for HBO Max. One logical way to increase its subscriber base is to get its channel on one of the top streaming-video platforms.
To temper expectations, investors should remember that neither company has confirmed the report from The Desk. Considering AT&T just came to terms last week with Amazon to get HBO Max on Fire TV, it's extremely likely it's working on a similar deal with Roku. That said, it's not 100% verified and it doesn't necessarily mean the two sides will actually reach an agreement in the end.
But if Roku does shake hands with AT&T to get HBO Max, it's a big deal. It will mean that Roku will have partnered with every major media company to make their services available on its neutral platform. The proposition to both use and stay with Roku will be compelling for consumers.