Online retail giant Amazon is making moves to supersize its video-channel business, which they want to take world-wide, according to a report by NBC News on Friday.
The company already accounts for about a quarter of all online sales in the United States, but they’ve recently begun negotiating with small television channels, several major program providers confirmed to NBC News.
Subscribers to Amazon Prime now get TV, movies and music, as well as free shipping on online purchases. They can also pay extra for premium channels, including HBO and Showtime, along with niche-interest services on a variety of topics.
While pay-TV providers scale down their offerings into cheaper, so-called “skinny bundles,” Amazon reportedly plans to scoop up smaller TV channels with minimal distribution, in an effort to eventually become a video destination for every imaginable niche. Their offerings will be focused on millennial audiences.
“They are doubling down on the channels business,” said one industry programmer involved in the negotiations. “They’re interested in doing deals with smaller indie networks, where they can get rights to channels that are not handcuffed into [traditional distribution] bundles, and they’re interested in offering them individually. Eventually, they may bundle them together.”
Turner Broadcasting’s Adult Swim and Boomerang, or Viacom’s VH1 and CMT, are similar to what Amazon wants to do.
Customers can currently purchase Viacom’s Comedy Central Stand-up for $3.99, or Britbox, which offers British shows for $6.99, and Amazon splits the revenue with channel owners.
Greg Hart, vice president of Amazon Video, is reportedly spearheading the current talks. Industry insiders say that the company is focused on creating a global platform for new online TV channels.
Tom Rogers, the former chief executive of TiVo and executive chairman of the sports app WinView, said that if Amazon offers the paid add-on channels as part of the Prime Video offering, they could potentially “have more impact on the TV industry than any other development down the road.”
Experts estimate that Prime has roughly 66 million subscribers, paying $99 per year for the service.
This month, Amazon’s global video chief, Roy Price, told Variety that the company’s chief executive, Jeff Bezos, wants him to find the next “Game of Thrones”; arguably one of HBO’s biggest hits ever, having earned the company 16.7 million viewers for its season finale last month.
Price told Variety that the company was ending its development of certain smaller series in pursuit of big-event TV.
Amazon is in a unique position, in that it could potentially track the ads viewed on its TV channels and then link them to online purchases. For instance, earlier this year, Amazon partnered with the drinks company Diageo to offer 20 minute “shoppable films.”
Amazon’s attempts at building its own audience begin on Sept. 28, which is when the company will begin streaming an NFL game — the Green Bay Packers versus the Chicago Bears — to its Prime subscribers. Amazon has a 10-game NFL package that it shares with other broadcasters, including NBC and CBS, having paid $50 million to steal away the digital football package from Twitter.
Amazon will also use its Alexa voice recognition machine to promote its football streaming, while the NFL games themselves will be used to promote the company’s own online video shows.
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