Amazon Channels Debuts In UK & Germany, To Offer Live TV
Zacks Investment Research | May 23, 2017 10:48PM ET
Amazon.com, Inc. (NASDAQ:AMZN) yesterday launched Amazon Channels, its live television programming in Europe.
Amazon Channels will offer on-demand as well as live programming from third party broadcasters to Prime Video subscribers in the UK and Germany. They will now have the option to choose from 40 different channels without subscribing to a bundle or contract. Some television networks whose content will be available on Amazon Video include Eurosport, Discovery and ITV (LON:ITV), among others.
This is the first time that Prime members in Europe have an option to pay for only what they wish to watch. Price per channel will range from £1.49 ($1.94) to £9.99 ($12.98).
We note that Amazon’s stock has underperformed the Zacks Internet Commerce industry over the last one year. Its share price has appreciated 37.2% compared with the industry’s gain of 46.7%.
Despite this underperformance, we believe there are a lot of factors that could turn the wheels in favor of Amazon. These include expansion of Prime, its grocery initiatives and efforts around AWS. The company capitalizes on its execution strength, robust performance and technological prowess.
Is it a Threat for Pay-TV Providers?
Yes, to some extent. Pay TV providers like Sky and BT (NYSE:BT) usually engage customers with large, and often an expensive bundle of channels or make them enter long-term contracts. To date, customers in the UK and Germany did not have much of a choice.
But now with Amazon giving them this freedom, the scenario is about to change. It is not only competing with pay-TV operators but actually challenging their existence. It will be interesting to see if pay-TV providers can come up with counter strategies.
The move puts Amazon in direct completion with Facebook (NASDAQ:FB) in Europe, which is making some heavy investments in live video. Notably, Amazon’s video streaming rival Netflix (NASDAQ:NFLX) has no plans to offer live TV.
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