Amazon Readies to Take a Bite Out of Online Pay-TV Market?

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In yet another effort to move Amazon.com (NASDAQ:AMZN) from the computer room to the living room, the Wall St Journal reported Tuesday that the e-commerce giant has been courting several entertainment companies about the prospect of licensing their television channels for a new online pay-TV service. Amazon already offers its Prime customers the use of a Prime Instant Video service — a library of various TV shows and movies on demand for subscribers — but the company still has yet to secure a tie-up with media companies that would allow it to offer live TV channels like the ones currently available on cable or satellite TV.

It’s a hard market for Amazon to crack because the company already faces significant competition from rivals going for the same TV gold. Sony Corp. (NYSE:SNE), Google (NASDAQ:GOOG), and Intel (NASDAQ:INTC) are among the few which have worked to increase their presence in the pay-TV world, and media companies are still showing a reluctance to nail down any deals because they don’t want to risk harming incumbent pay-TV providers, which currently fuel the entertainment industry.

Nonetheless, according to the Journal, insider sources say that Amazon has approached at least three big media conglomerates seeking rights to distribute their channels online, and the company is also in the midst of developing a set-top box to stream video. The Seattle-based company has an advantage over its competitors thanks to a number of relationships it fosters with TV networks and studios, but those companies seeking to launch new services still have struggled to negotiate terms that allow them to price their services competitively, and Amazon may face the same fate.

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