Amazon drops plans to launch its cable TV service

CIOL Writers
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Amazon's plans to launch an online streaming service have been scrapped because the company believes that it cannot make enough money on the service, as per a Reuters report. A Bloomberg report which came out earlier this year also mirrored the same issue.


The world’s largest online retailer has also been unable to convince key broadcast and basic cable networks to break with decades-old business models and join it's a la carte Amazon Channels service. On Monday the company made waves in the entertainment world with the purchase of global television rights to “The Lord of the Rings,” planning a multi-season series to draw more viewers to Prime.

At the same time, Amazon is looking to offer a wide variety of television channels through Prime. It originally aimed to offer a limited bundle of key broadcast and cable networks for a set fee, similar to offerings from YouTube and Hulu.

Such an offering, known in the industry as a “skinny bundle,” is a way of capturing the attention of younger viewers who are dropping traditional, expensive cable or satellite TV packages in favor of channels watchable on smartphones and tablets.

But now the company has decided not to move ahead with the service as it would yield very low profits and it did not necessarily indicate the direction in which the TV industry will eventually go, the Reuters report said.

For now, though, Amazon has decided to stick with its Channels service, which lets Prime customers subscribe to Showtime, Starz, HBO, and other premium networks and stream them through Amazon Video-enabled devices. It currently includes more than 140 networks in the US.