Market Overview

Amazon Denies Rumored Online Live Pay-TV Service

Amazon Denies Rumored Online Live Pay-TV Service

Although The Wall Street Journal reported Tuesday that Amazon (NASDAQ: AMZN) was planning a new online live pay-tv service, Amazon’s Drew Herdener told USA Today the rumor was not true.

The report in The Journal said that the online retailer was contemplating offering live TV channels through its Prime Instant Video service. According to the newspaper, Amazon had approached at least three media content providers with the intent of distributing its TV channels online.

In an email, Herdener told USA Today, “We continue to build selection for Prime Instant Video and create original shows at Amazon Studios, but we are not planning to license television channels or offer a pay-TV service."

The denial puts a damper on the hopes of Prime members who pay $79 a year for a whole host of services including free two-day package delivery, access to thousands of books in the Kindle Owners Lending Library, and free streaming video including movies and a number of television shows.

Amazon’s Prime service is widely seen as competition for other streaming services like Netflix and Hulu. Although these online video services do not offer live TV programming, mostly because media companies do not want to jeopardize their relationships with cable and satellite providers, Sony said it would test a service that offered live television programs later in 2014.

In addition, Verizon Communications said Tuesday that it planned to purchase Intel's digital TV division and hoped to eventually offer live TV channels over the Internet that could be streamed to televisions, smartphones, and other devices.

Related: Amazon's Plan: Shipping Before Clicking

As The Verge noted, rumors surrounding Amazon and a set-top box have been around since last year. It was reported that the set-top box would be available by the end of 2013, but that did not happen. Sources told The Verge that the company had decided to delay the device.

When the rumor of a live TV service first surfaced Tuesday, there was speculation that the set-top box would be paired with the new service.

Despite Amazon’s denial that live TV streaming is imminent, interest in “over-the-top” service remains strong – both on the part of companies and the public, always anxious for more and better entertainment options.

The main problem, to date, has been the inability to negotiate with content providers. Given streaming contracts already in place, Amazon would be well positioned to work out live programming agreements with media conglomerates.

For now, however, Amazon said online live pay TV is a “No go.”

At the time of this writing, Jim Probasco had no position in any mentioned securities.


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