The Wall Street Journal reports that Amazon has been in talks with some of media’s heaviest hitters to secure licensing rights to stream Tv shows and movies for their online subscribers.
Amazon.com Chief Executive Officer Jeff Bezos is trying to get a bigger piece of the digital entertainment services pie that outfits like Netflix, Google, and Apple are dishing out to the public. According to the WSJ report Time Warner, MTV owner Viacom Inc. and General Electric Co.’s NBC Universal have all been contacted by Amazon about acquiring licensing rights to their digital content.
Netflix is already the elephant in the room when it comes to providing both streaming content and dvd content delivered by mail into the living rooms of America. Netflix has discovered this to be a growth market and has recently spent $200 million to jazz up its streaming content from Epix, which is a movie network backed by MGM, Paramount, and Lionsgate.
Netflix has seen its streaming numbers nearly double in the last year and is using revenue from its dvd rental business to secure programming for its web streaming business.
Some Amazon execs are reported to be a bit nervous about taking on Netflix because of the high licensing fees Netflix can afford to pay to stream their content. The costs imposed on Amazon to do the same may affect their stock prices negatively.
One ace that Amazon might have up its digital sleeve is to add the new streaming service onto existing Amazon Premium accounts as a freebie. Premium subscribers pay Amazon a $79 yearly fee that entitles them to free or reduced shipping fees on products they buy online there.
The proposed new subscription offering would be a change in direction from Amazon’s present video-on-demand service that hasn’t been as successful as Amazon would like. It presently sells films and TV show downloads and rents movies through its website and on Roku Inc.
Rumor also has it that Apple Inc. will announce in the next few days a deal it has made with Fox and Disney to stream downloads of Tv shows through its Itunes store for 99 cents each.
Media companies are walking a delicate balance here about how to provide content, and at what price, to cable and satellite services as well as the Internet … which is slowly merging with Tv channels. For 2010 it’s estimated that the combined revenue the media companies will receive from the tv broadcasters for their content is about $30 billion.
Right now the media content providers seem to be licensing only their older stuff to the streaming companies and in this way trying not to cause a drop in their commerical tv revenue stream.
