Amazon.com (AMZN) is moving closer to launching a live TV streaming service to complement its Prime video service, which offers movies and on-demand content, analysts speculate in the wake of media companies' earnings calls.
In the pay-TV industry, "virtual MVPD" (multi-channel video programming distributor) is a term for a cable-TV-like service delivered via the Internet.
“Amazon appears most likely to launch a virtual MVPD in 2016,” Pacific Crest Securities analyst Andy Hargreaves said in a research report. “Amazon was hinted at multiple times throughout the quarter as being in negotiations with content providers in the hopes of launching a video product in the future.”
AMC Networks (AMCX) referred to ongoing “experimentation” at Amazon on its Q4 earnings call on Feb. 25. Walt Disney (DIS), meanwhile, mentioned Amazon while discussing ESPN’s streaming strategy on Feb. 17.
Satellite TV broadcaster Dish Network (DISH) has more than 500,000 subscribers to its “Sling” Web TV service, launched in early 2015, analysts estimate. However, Sling does not offer live content from the four major broadcast networks (ABC, CBS, Fox and NBC).
Bloomberg reported in October that Amazon was in talks with Comcast’s (CMCSA) NBCUniversal, CBS (CBS) and others.
Amazon’s challenge would be aggregating content licensed from major programming networks. Apple (AAPL) reportedly has, for now, broken off talks with the broadcast networks for a Web TV service.
If Amazon’s offers live content, it would set itself apart from Netflix (NFLX) and Hulu, both of which do not. Amazon, like Netflix, has already moved into producing original content.
One Amazon strategy could be licensing content for current seasons of popular programming now available mainly from pay-TV companies. Federal regulators are probing the influence of cable TV companies over content deals, the Wall Street Journal reported Sunday.
In a report in mid-February, Jefferies noted that Amazon’s Prime video service offers the most content from CBS, including “Vegas.” Its on-demand shows, though, are from prior broadcast seasons.
“Relative to Netflix and Hulu, Amazon Prime carries significantly less network programming,” said the Jefferies report. “Overall, the platform only carries nine fall shows aired between 2012 and 2015, six of which aired on CBS.”
Amazon in 2015 licensed season-one episodes from NBCUniversal’s hit, “Mr. Robot,” which airs on the USA Network. Amazon also signed content deals with AMC Networks and Time Warner (TWX) for six seasons of HBO’s “Sex and the City.”
