Amazon had been very successful with its Prime membership idea which not just includes benefits for shopping, but gives access to a plethora of Amazon services including Prime Video, Music, Kindle and more. The company was in talks to launch an online streaming service which would include popular shows from U.S. broadcast and cable networks. Looks like Amazon has dropped its plan to do that.
According to Reuters, the company believes that it cannot make enough money on such a service. Fine line, it’s not easy to compete with traditional way on how broadcast and basic cable networks work and make money. The idea behind the service to pull young viewers to get on board Amazon streaming service by offering a part of what was available with the TV.
The reversals come a month after the abrupt departure of Roy Price from his job as head of Amazon Studios, the company’s high-profile television production division, following an allegation of sexual harassment, which he has contested.
They show how difficult it is for Amazon to change entrenched habits in the U.S. entertainment business in the same way that it has done in retail, cloud computing and other areas.
Amazon caters video streaming through one subscription model. The way traditional TV subscription work is different. They are definitely costly, and the subscriptions are usually stacked, but they don’t depend on the Internet.
Twenty-First Century Fox Inc (FOXA.O), Viacom Inc (VIAB.O) and other media firms typically require cable companies or other partners to take their weaker channels along with their stronger ones, to prevent the weaker ones withering on the vine.
Amazon did not want to do that. It also asked networks for provisions that are foreign to the entertainment business, including discounts based on the volume of subscribers it brings in. “That might be standard in selling, but it is not how it works with content,” said one industry source.