Amazon has seemingly cancelled plans to launch an unbundled a la carte internet TV service, featuring top channels. Reuters says Amazon was unable to convince networks to sign on and struggled to find profitable business arrangements. It has been widely reported that Apple wanted to launch a similar skinny bundle of streaming channels, but also faced industry backlash and failed to bring the service to market.
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A skinny bundle would include a subset of the channels US customers currently have to subscribe to, at much lower monthly fees.
Apple was looking to launch a similar service in the $30/month range, but struggled to strike deals with cable networks. Content providers did not want to abandon most of its ‘portfolio’, instead asking Apple to charge more for the monthly service in exchange for including additional channels. Apple didn’t budge.
The Reuters report says that Amazon hit the same problem in its negotiation attempts:
Twenty-First Century Fox Inc, Viacom Inc 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.
Eddy Cue has been quoted as saying ‘Time is on my side’, clearly believing that the networks will ultimately need to cooperate with Apple. Despite talks dating back to 2013, such a service does not seem to be any closer four years on. The reported failure of Amazon to secure deals highlights how difficult it is to crack into the market.
Amazon has apparently decided to focus on expanding its Amazon Channels offering, which offers separate subscriptions to HBO, Showtime and other networks to Prime members. However, the content library is limited and relationships are still funnelled to the content providers rather than a central, integrated, system ran by Amazon.
Apple integrates media apps from various partners into a TV app for iPhone, iPad and Apple TV but again the aggregation is only skin-deep. Users still have to subscribe separately and actually watching content kicks users out to the respective cable network app.
Whilst Apple has entered successfully into the media subscription space with Apple Music, an Apple video subscription service with content from cable networks does not seem anywhere close to being a reality. Apple is focusing on original content efforts, with the first shows launching as soon as 2019.
(On a related note: Apple and Amazon announced at WWDC that a Prime Video app for Apple TV would debut ‘soon’. At Apple’s September event, Tim Cook reaffirmed the app’s existence but did not specify a timeframe. It is now the middle of November with still no confirmed date for the app’s launch).