Report: Amazon Backs Out of its Bundled Video Service Plans
Cable TV subscriptions are getting more and more expensive these days, which has motivated an increasing number of people to “cut the cord.” Some are signing up for TV studio-sponsored services like CBS All Access and Showtime Anytime, while others are opting for bundled video services like Netflix, YouTube TV, and Sling TV. Amazon had reportedly been working on a subscription service of its own, but a new report from Reuters claims those plans have been canceled.
Amazon was concerned that such a service would “yield too low a profit margin” and was unable to convince “key broadcast and basic cable networks to […] join its [platform],” Reuters reported, citing “people familiar with the matter.” One sticking point was channel bundles: Reportedly, some of Amazon’s partners wanted it to take weaker channels along with stronger ones, and refused to extend the company discounts based on the volume of subscribers its service brought in.
That’s not to suggest Amazon isn’t exploring other business models. Amazon this week announced that it had purchased the global television rights to “The Lord of the Rings,” and we recently wrote about the retailer’s rumored free, ad-supported tier of their Amazon Prime Video service. As things stand right now, you have to subscribe to the company’s $99-per-year Amazon Prime service to gain access. However, it’s possible that Amazon could cover membership costs with advertisements if they opened Prime Video up to everyone.
For now, though, Amazon has decided stick with its Channels service, which lets Prime customers subscribe to Showtime, Starz, HBO, and other premium networks a la carte and stream them through Amazon Video-enabled devices. It currently includes more than 140 networks in the U.S.