Amazon is shelving plans to introduce a pay-TV bundle over concerns it can’t reliably turn a profit with the service, according to a report today from Reuters. The service was to be part of Amazon Channels, the company’s current cable subscription offering that lets users subscribe to HBO, Showtime, and Amazon’s new anime streaming service, among more than 100 other cable and digital-only networks. The pay-TV tier would have included local broadcast and cable channels in a skinny bundle similar to Sling TV, PlayStation Vue, and YouTube TV, but presumably for less money and with more popular channels unbundled from other, less desirable options.
However, Reuters reports that Amazon couldn’t convince networks to break with the cable bundling model and offer popular channels as standalone options in a more attractive a la carte model, at least not at the rates Amazon was willing to pay. That echoes the same challenges faced by Apple, Google, Verizon, and others in their attempts to bring down the cost and expand the accessibility of digital pay-TV bundles. As it stands, rights owners still largely have control in how TV is packaged and distributed, leading to concessions like Sling’s multi-tier pricing model and the higher cost of services with more extensive channel support, like YouTube TV.
While its abandoning its pay-TV bundle efforts, Amazon is still going to focus its sizable media war chest on building out its Amazon Video library with more original content — including a new television series based on The Lord of the Rings — and its Amazon Channels service with more exclusive rights deals with networks. Reuters reports that Amazon may just be biding its time, waiting for when cable subscriptions fall far enough that networks decide to more fully embrace the a la carte model.
After all, no other tech company is better positioned to offer a holistic cable replacement than Amazon. The company has a top-tier streaming service, a set-top box hardware line with Fire TV, and an extensive data-backed retail network for DVD, Blu-ray, and digital rentals. More so than Apple’s iTunes, Amazon’s video platform is now the de facto destination for watching film and TV that isn’t readily available on Netflix, Hulu, HBO, and elsewhere.