Amazon 'weighs' pay-TV option

24 January 2014
NEW YORK: Amazon, the world's largest e-commerce retailer, is said to be in the early stages of exploring its own online pay-TV service which would make it the latest large corporation to pursue this option.

According to a report in the Wall Street Journal, the tech giant has met at least three major media companies about licensing their content via live TV channels.

It is thought the service could appeal to consumers who have turned their backs on traditional pay-TV because of their frustration with outdated technology or rising bills and it follows similar initiatives from Sony and Google.

It also follows confirmation from Intel that it was giving up on its own attempts to launch a pay-TV service and was selling its online platform to Verizon Communications.

Although the report said Amazon was still in the early stages of discussions with media companies and it wasn't certain that it would move the initiative forward, Amazon denied plans for its own pay-TV service.

It said: "We continue to build selection for Prime Instant Video and create original shows at Amazon Studios, but we are not planning to licence television channels or offer a pay-TV service."

However, if the company does decide to go ahead, the report noted that it already has some advantages, such as its established relationship with a range of TV networks and studios.

Analyst Tony Wible, from Janney Capital Markets, thought there could be scope for Amazon to provide an online TV service "at cost" and use it to sell other products through the TV set. "There's a precedent of them pricing stuff roughly at cost in order to sell other stuff," he said.

Meanwhile, Cantor Fitzgerald analyst Youssef Squali said Amazon spent approximately $1bn in content last year, although spending on streaming video, mobile devices, grocery deliveries and other initiatives hit the company's profit margins.

Data sourced from Wall Street Journal; additional content by Warc staff
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