What's Likely Behind Amazon's Reported Interest in Buying a Slew of TV Channels
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Version 0 of 1. Though cord-cutting keeps gaining converts and TV viewing has fallen sharply among younger consumers, the average American still spends about 5 hours per day watching TV, with about 4.5 hours spent watching live TV and the rest on DVR-stored content. A lot of this, of course, is driven by interest in content that can't be found elsewhere -- for example, live sports or cable news networks -- but it's also clear that a lot of consumers (older ones especially) remain fans of the proverbial boob tube's convenience and simplicity. There's no need to pick out a show, movie or video clip to stream; all you need to do is turn on a TV set and enter a channel number, and content is pushed to you. TV's enduring popularity could have much to do with Amazon.com Inc.'s (AMZN) reported interest in owning and distributing channels. Citing "major program providers," NBC News reports Amazon has "started talks to buy scores of small television channels." One source adds Amazon is looking to buy "smaller indie networks" that aren't tied to the traditional distribution bundles that media giants sell to pay-TV providers. The source also says Amazon is interested in offering the channels individually, but could bundle them down the line. But it's worth noting that while the existing Amazon Channels platform sells streaming services from HBO, Starz and many niche content providers on an a la carte basis, just about any content that Amazon owns or has licensed distribution rights for is offered via Amazon Prime. Also: Amazon tends to be pretty tight-lipped about what it plans to do with assets it's set to acquire. One only has to look at its handling of the Whole Foods acquisition: The company issued a short press release sharing almost no details about its plans, and didn't do anything to provide more details until a few days prior to the acquisition's closing. More of What's Trending on TheStreet: Considering how Amazon has bent over backwards to use acquired businesses and content to provide new Prime-related perks -- this holds for everything from Whole Foods to the Twitch game-streaming platform to Amazon's Thursday Night Football streaming deal -- Prime is the logical home for any TV channels that Amazon owns outright, along with any on-demand streaming rights those channels have. Putting them there would yield a few different benefits: NBC News' report shortly follows one from Variety stating Amazon will now direct more of its spending on original shows towards creating big-budget hit dramas in the same league as Game of Thrones. And it comes a few months after JPMorgan forecast Amazon would spend $4.5 billion on video content this year. No one can accuse Bezos & Co. of thinking small. If they decide to make a big bet on independent TV channels, odds are that they won't use them to launch a bunch of new small-time subscription services, but to make one rather large subscription service of theirs more appealing. And at least among certain groups of subscribers, the company should succeed in doing just that, provided it invests smartly. |