Friday, January 24, 2014

Amazon denies reports it is in early stages of streaming pay TV service


Amazon would not be not the only service attempting to chip away at the monopolies cable companies have on distribution.Simon Dawson/Bloomberg via Getty Images

Amazon has denied a report that it plans to roll out a pay TV streaming service that will feature live programming from several media companies, according to USA Today.

The Wall Street Journal reported Tuesday that Amazon had approached at least three media companies, citing people familiar with the matter.

Amazon now offers on-demand TV shows and movies free to customers who are members of its premium shipping service, Prime. A move toward such online streaming would add live television channels to the on-demand video service and come as a challenge to cable- and satellite-television service providers.

If the service did come into fruition, the world's largest online retailer would join the ranks of several other companies trying to own the living room with TV programming piped through the Internet. Intel attempted a similar move, though it scrapped its ambitions and sold its project to Verizon on Tuesday for an undisclosed sum.

The venture would also add to the growing number of services popping up that are eating away at the profit margins of legacy distribution companies like Comcast and Time Warner.

Television giants tend to be reluctant to make distribution deals that might upset long-standing partners whose fees and payments have fueled industry growth.

Companies like Netflix and Hulu have seen their customer base grow by 4 percent in the past two years, while TV subscriptions have dropped 6 percent, according to research from the NPD Group. Google's YouTube and Microsoft are also working to step up their streaming-video program services.

It's not just cable companies that have their backs against the wall. The four big broadcast companies have waged an all-out war on the streaming service Aereo, which uses digital "antennas" to broadcast local TV channels without paying the companies the traditional lucrative retransmission fee.

Aereo's customers, instead of paying cable companies a sizable monthly fee, pay the service as little as $8 a month for access to local channels and a collection of syndicated programs, movies and children's programming. The company also offers limited Spanish-language channels.

The Supreme Court has agreed to decide whether Aereo has the right to operate without paying the broadcasters. So far, lower courts have sided with Aereo.

Verizon, meanwhile, announced on Tuesday that it is buying Intel Media for an undisclosed price. The chip-making giant intended to deliver movies and TV programming to customers via the Internet cloud, but the project never got off the ground.

Verizon said the acquisition "will accelerate the availability of next-generation video services" delivered to devices, including mobile phones and tablets.

The deal includes intellectual property rights and other assets for Intel's OnCue Cloud TV platform. Verizon will also offer to keep the 350-person Intel unit, which will continue to be based in Santa Clara, Calif.

Al Jazeera and Reuters

Cable companies have struggled to keep their subscriber base in recent years, as more people opt out over costly cable bills, poor customer service and subscriber-fee disputes between the distributors and media companies - like the recent feud between Time Warner and CBS - that leave millions of customers without access to channels they have paid to receive.

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