As Amazon Toys With TV, Networks Don't Want to Be Left Out

AMC Exploring Internet-Based TV Packages

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Amazon is looking into selling slim packages of TV networks over the internet, according to industry executives.
Amazon is looking into selling slim packages of TV networks over the internet, according to industry executives. Credit: Courtesy Amazon

With investors worried about declining consumer interest in cable TV, media companies are looking to a technology giant to reel in customers:

Josh Sapan, chief executive officer of AMC Networks Inc., said on an earnings call Thursday that Amazon is exploring selling smaller packages of TV networks over the internet, echoing comments made by ESPN President John Skipper a week before.

While Amazon has been weighing the idea for some time, as Bloomberg reported in October, media executives have only mentioned it publicly after two recent developments: the continued decline in their companies' stock prices and Apple Inc.'s suspension of plans for a live TV service. As talks with Amazon advance, the executives are trying to convince skittish investors that these so-called skinny bundles will halt recent subscriber declines and maybe even bring new customers into the pay-TV ecosystem.

While only a couple of online bundles are currently on the market, including Dish Network Corp.'s Sling TV and Sony's Playstation Vue, many more are under discussion. Amazon, the world's largest online retailer, has both the financial resources to be a powerful player and an established subscriber base for its Prime video service. Striking deals with the company could give cable networks like AMC leverage with pay-TV providers such as Comcast Corp. and AT&T Inc., which would face added pressure to keep AMC in the bundle or risk losing fans of its hit series "Walking Dead" to Amazon.

'Some Experimentation'

"There's some experimentation, I guess, one might call it, going on in early ways, but different ways, at Amazon," Mr. Sapan said on the call with analysts.

Amazon didn't respond to requests for comment.

Media companies are jockeying to have their channels included in skinny bundles. Last year, Walt Disney Co.'s ESPN sued Verizon Communications Inc. for excluding the sports network from a basic TV package. Verizon said last week it will offer customers two low-cost bundles -- one that includes sports channels and one without them.

Still, pared-down TV packages are hard to create because programmers want all of their channels to be included in them. Each channel raises the price of the service, making it less desirable to consumers. Apple Inc. suspended plans to offer a live internet-based TV service after struggling to get the mix of programming it wanted at a low price.

'Half Dozen'

At a Re/code conference last week, ESPN's Mr. Skipper said Amazon was having discussions with programmers about a video service. He said that Amazon wasn't alone, and "there is very significant interest" to deliver TV service "from a bunch of people."

John Martin, the CEO of Time Warner Inc.'s Turner Broadcasting, said this week that Turner is talking with "a half dozen" new companies looking to sell TV service over the internet.

While he wants to make sure Turner channels are in skinny packages, Mr. Martin said a service like Sling TV is "not a broad-based offer that is going to be attractive to lots of people." Sling TV, which was unveiled a year ago and which includes Turner's CNN, TBS and TNT, has about 600,000 subscribers, he said.

"We're getting paid on those subscribers," Mr. Martin said at a media conference. "And so our goal would be the more Slings there are, the more that we're going to try to make sure our networks are in those packages."

AMC's Mr. Sapan said he was confident that all of his company's networks would be included in such packages.

"If we have brands that really are in people's heads and we have a core constituency that cares about BBC America and about IFC and the Sundance Channel and WEtv, that will stand us in very good stead."

~~ Bloomberg News

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