On yesterday’s Time Warner Q1 ’17 earnings call, HBO’s CEO Richard Plepler said that the company’s content licensing deal with Amazon would not be renewed and therefore would expire at the end of 2018. The deal was originally announced in April, 2014 and allowed Amazon to include iconic series like “The Sopranos,” “The Wire,” “Deadwood” and others in its Prime Video service.

Although Plepler cited “an acceleration in our digital business” as the reason for the decision, I believe that the more important driver at work is a repositioning of how the immensely valuable HBO will be used when AT&T’s acquisition of HBO parent Time Warner occurs later this year (assuming regulatory approval is granted, which I think is very likely).

In fact, even pre-closing, we’ve already seen ample evidence of how AT&T will use HBO to drive its other strategic priorities, which are in turn part of broader market dynamics.

For example, AT&T’s DirecTV Now is using HBO as a bonus to better compete in the already hyper-crowded skinny bundle space. HBO was included as a $5 per month add-on option for initial DirecTV Now subscribers, by far the lowest rate for HBO anywhere in the market and harkened back to the early days of cable when “We have HBO” was a lure for hotels everywhere. DirecTV Now subsequently gave away a year of HBO to early subscribers to partly compensate for technical issues.

AT&T is also using HBO to help differentiate its unlimited wireless service as all carriers shift their emphasis away from capped data plans. AT&T announced last month that all AT&T Unlimited Plus wireless subscribers would get HBO included with their subscriptions, on top of a $25 per month “video credit” for also subscribing to DirecTV, DirecTV Now or U-verse.

These offers are all part of a larger trend of video being used as bait for wireless carriers to lure and retain subscribers. With Comcast’s new Xfinity Mobile service launching this year, which is heavily discounted to existing video subscribers, we should expect video to be used even more aggressively by wireless companies.

In this context, it’s clear that HBO is going to play an even more pivotal role for AT&T when the Time Warner acquisition is completed. As a result, it’s essential that HBO be able to deliver the maximum value possible. Having many of its marquee shows included in Amazon’s Prime video service clearly undercuts that objective, hence the decision not to renew. HBO’s long-term value to AT&T, especially with 5G rollouts coming soon, is far higher than short term licensing revenue from Amazon.

In fact, the edge is taken off the decision not to renew because HBO will continue to be available under Amazon’s “Channels” program, whereby Prime subscribers can easily add any of 100+ different SVOD services. Referencing Channels, which HBO belatedly joined late last year, Plepler said on the call yesterday that HBO had seen “enormous momentum there.” That corroborates what I have heard anecdotally from other content providers who are involved with Channels, which I’ve been extremely bullish about since its launch in late 2015.

Stepping back, HBO’s decision not to renew with Amazon again shows how quickly the video industry continues to evolve. Three years ago, mining the value of content libraries was a key strategic driver for HBO, Time Warner and lots of other content owners. But now, with companies across the industry rushing to launch their own OTT services, wireless playing a far bigger role in video distribution and M&A resetting priorities, it makes perfect sense for HBO to adjust its strategy and retain its programming for its own services.