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Amazon mulls offering online pay-TV service- WSJ

January 21
9:38 PM 2014

In what is viewed as Amazon.com Inc's expansion of its online video efforts, the e-commerce giant has talked with large entertainment firms about the possibility of getting a license for their television channels for an online pay-TV service it is thinking of introducing, according to The Wall Street Journal. The report said the new service would provide live TV channels similar to those offered on cable or satellite TV. Amazon currently provides its Prime free-shipping service subscribers various TV shows and movies on demand through its service called Prime Instant Video.

The WSJ said Amazon's foray into online pay-TV is still nascent and it's not even sure if it will proceed. Other companies like Sony Corp and Google Inc are also moving forward with similar projects. An earlier report of The WSJ also said that Amazon was in the process of making its own version of a Roku player or set-top box which can stream video.

Sources told The WSJ that Amazon has already approached at least three large media firms in its quest to get the rights to have their channels distributed online.

However, getting rights for TV channels has become a hurdle for companies looking to get their Web-TV services underway. Media conglomerates that own TV networks and studios are hesitant to undertake any move that could potentially be detrimental to its existing pay-TV providers who are fueling the industry's growth because of the payments they give to carry TV channels. The firms looking to introduce new services have encountered difficulties when it comes to negotiating terms that would enable them to price their services in such a way that it will be able to compete with rivals, the report said.

Unlike some newcomers to the industry, Amazon already has links with various TV networks and studios. The report said these relationships can be used as a jumping board to start negotiations. 

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