Amazon has an online pay-TV service in the works, according to The Wall Street Journal.
The newspaper quoted the always-helpful “people familiar with the matter” for its information. In a statement, Amazon itself denied any plans “to license television channels or offer a pay-TV service.”
Despite that public denial, the Journal insists that the online retailer has engaged in talks with at least three major entertainment companies about licensing and distributing television channels online. While Amazon already offers older seasons of television shows as part of its streaming service, these new deals would allow the retailer to offer a variety of current television selections.
If Amazon managed to lock up a deal for television channels, it would give the company an advantage over other competitors in the space. Netflix, arguably its biggest opponent in the streaming business, only offers content that premiered months or years before (with the exception of its original programming, which debuts in instantly-available chunks). Apple’s iTunes includes current television shows, but new episodes are only available a day or two after their initial airing. Hulu features the latest network programming, but the selection is limited; it also lacks an extensive portfolio of movies and older television shows. Amazon pairing pay-TV with its existing streaming library would give it content and delivery that surpasses, in one way or another, most of those rivals.
But the media conglomerates that own those channels would surely demand a steep price from Amazon, which (given its longtime determination to keep prices low) would likely prove unwilling to pass those costs onto its customers, putting any potential deal at risk.
Amazon must also consider the recent ruling by the U.S. Court of Appeals for the District of Columbia, which partially negated the FCC’s Open Internet Order; as a result of that decision, Verizon and other broadband providers theoretically have more leeway to block or slow down Web properties for competitive reasons, or charge certain companies more for delivering content over their networks. If Amazon announces a plan to increase the amount of content it streams online, that could spark a round of tense negotiations with carriers and broadband providers over “fees” for access and speed (and ignite a huge debate over “net neutrality”). The results might prove too costly for Amazon’s taste.
With so many variables, no wonder Amazon’s keeping tight-lipped about any potential deal in the works.