Amazon seeks wider market video services
Plans to carry programming from other providers in its big fight with Netflix
Amazon.com Inc will soon let viewers of its Prime Instant Video service tap into other ondemand networks, according to people with knowledge of the plans.
Prime customers will have the option of adding other online subscriptions to their accounts, including major, well-known movie and TV channels, and Amazon will also sell prepackaged bundles of its own creation, said the people. They said the new feature may go live as soon as next month.
The appeal of others’ programming may help lure new customers to Amazon Prime as it competes with Netflix Inc and Hulu LLC. The new feature would mark the next evolution in the online giant’s approach to home entertainment, combining its expertise in retail with its growing investment in video.
Prime Instant Video would resemble something between a cable-TV subscription, though without live programming, and the online array of video offered through devices from Roku Inc, Apple TV or Amazon’s own Fire TV.
The financial arrangements with partners vary, but most of them expect to share revenue in some form with Amazon, the people said. Viewers will still know the shows are from a different company because Amazon will create landing pages for other video services within Prime, they said.
Customer base
The partnership with Amazon gives the included networks a crack at adding subscribers from Prime’s immense customer base, and reach younger viewers who don’t sign up through cable-TV packages. Amazon Prime subscribers get videos along with free two-day shipping on many products from the online retailer, which doesn’t disclose how many customers it has or how many use it to watch online.
In July, Consumer Intelligence Research Partners estimated that Prime had 44 million members. Most analysts estimate that in terms of viewers, it’s the secondmost popular internet TV service after Netflix, which had 43.2 million US customers at the end of the third quarter.
Unlike Netflix and Hulu, Amazon already distributes other TV services via its Fire TV. Fire TV competes with products made by Apple Inc, Roku and Google Inc. Amazon’s online store stopped selling some of those competing devices this year.
The changes to Prime Instant Video are separate from Amazon’s ongoing effort to start a live online-TV service that would compete directly with cable TV. Amazon continues to talk to media companies about that service, which could interest more users in the Fire TV. Apple is pursuing a similar strategy.
Netflix’s success building the world’s largest online pay-TV service has spurred companies like Time Warner Inc, CBS Corp and NBC Universal to create products of their own. They are also experimenting with new ways to distribute their shows and reach younger viewers who don’t sign up to cable-TV packages.