Amazon considering online live TV service, has approached at least three media conglomerates seeking rights to distribute their channels
Amazon Considering Online Pay-TV Service — Live TV Channels Would Compete With Cable, Satellite — Amazon.com Inc. has approached big entertainment companies …
Context & Ripple Effects
The Wall Street Journal reports Amazon has approached at least three media conglomerates about rights to carry their channels in a live online TV service that would sit alongside cable and satellite — though Variety's same-day pickup carries an Amazon denial of any over-the-top plan, so both halves of the story travel together as unconfirmed. The claim nonetheless drew unusually wide pickup for a sourcing-only report: Bloomberg, Quartz, Engadget, VentureBeat, GeekWire and others all ran it on January 21, 2014, which says something about how primed the market was for a big-tech entry into pay TV.
It lands inside a single week of confirmed Amazon expansion beyond retail — automated Kindle Kiosk vending tests announced January 9 and the Delaware warehouse union vote on January 16 — reinforcing the reading of Amazon as a company pushing into adjacent distribution businesses rather than defending an e-commerce core.
First-order effects
- If the approaches lead anywhere, the named media conglomerates gain a direct-to-consumer internet channel alongside their existing cable and satellite carriage deals, while those incumbent distributors immediately face a Prime-bundled competitor for the living room.
- Because Amazon itself denies the plan, the burden sits on the conglomerates' negotiating posture: any confirmed rights deal would validate what the companies have so far only acknowledged through unnamed sources.
Second-order effects
- Programmers holding both cable contracts and potential Amazon talks acquire a second bidding party, shifting leverage toward content owners at the next round of carriage-fee negotiations.
- Other large consumer-internet platforms would be pushed to evaluate equivalent channel-rights plays, since whoever aggregates live TV first sets the bundle terms for everyone else.
Third-order effects
- A pattern of tech platforms licensing linear channels points toward live television decoupling from cable and satellite infrastructure, with distribution power migrating to whoever owns the customer relationship and the billing.
- For regulators and antitrust watchers, the open question such a move raises is whether channel aggregation by a handful of platforms recreates the bottleneck economics of the cable bundle under a different owner.
The trend: Live television distribution is drifting from cable and satellite incumbents toward large internet platforms willing to license channels wholesale and resell them inside their own ecosystems.