Why should Sony and Verizon have all the fun? Amazon has talked with at least three “big media conglomerates” about the possibility of licensing channels for its own online pay TV service, The Wall Street Journal reports this afternoon, citing “people familiar with the matter.” The paper adds that the initiative “is in the early stages, and it isn’t clear whether it will move forward.” It also doesn’t have a business model yet. For the streaming plans to work, Amazon and others need programmers to agree to license their channels for rates that would enable a newcomer to be competitive. Some, including Disney, say that they would only go along with an initiative that offers the entire bundle of channels that cable and satellite companies sell. Seven companies account for 83% of primetime TV viewing by 18- to 49-year-olds, Morgan Stanley’s Benjamin Swinburne notes in a report today. They heavily depend on fees from cable, satellite, and telco video distributors.
Thus far no major programmer has broken from the pack, although Viacom was reported last year to have a “preliminary” agreement with Sony. The electronics company announced this month that it will launch a virtual pay TV service with tests to begin this year. Amazon currently offers movies and library TV programs, as well as a few original shows, on-demand through its Prime Instant Video service for customers who pay $79 a year, and also receive free shipping on many retail items. It also plans to sell a device to bring Internet video to TV sets, much like a Roku box or Google’s Chromecast.
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