Amazon would like to be your next video service operator: The retail giant has been pitching the idea to add third-party video subscription services to its Prime subscription service to TV networks and online video services, offering them offering them Amazon’s huge Prime customer base with its existing billing relationships as an incentive.
News of the initiative was first reported by Bloomberg Wednesday, which reported that the company may be getting ready to launch these kinds of video packages as early as next month. Variety has since been able to confirm the news, but also heard from industry sources that there is some considerable skepticism about Amazon’s efforts. At least one significant subscription service declined to be part of the offering, according to a source with knowledge of the plans.
An Amazon spokesperson didn’t immediately respond to a request for comment.
Many details about Amazon’s initiative are still unknown. However, it sounds like Amazon isn’t looking to build a full-blown TV service to compete with Sony’s Playstation Vue. Instead, the company may be looking to bundle existing as well as emerging standalone subscription products like the ones launched by HBO and Showtime as well as online-only subscription services, and offer them to Prime subscribers on an a la carte basis or through small bundles.
This would allow Prime subscribers to easily add channels from third parties to their existing Prime Video subscription, and watch their programming through Amazon’s existing apps. Amazon would handle the billing for participating networks and services, and in return take a cut from any subscription revenue. In a way, the model is similar to what Hulu has been doing with Showtime, which is currently being offered to existing Hulu subscribers as an add-on product.
Showtime and HBO may in many ways be the most natural partners for Amazon; both already use video service providers and other partners to market and sell their standalone video subscription services. However, existing online video services that have already built out apps for mobile and TV devices may be much more wary of Amazon’s proposition.
Bundling with Prime could potentially get them marketing advantages, but they would also lose the direct billing relationship with customers, something that not everyone is ready to do. In fact, at least one online video subscription service declined to join Amazon’s initiative for that very reason, Variety has learned.