Amazon Prime Is Starting to Look a Lot Like Cable
Amazon is dipping its toe into the world of bundling.
Maybe it’s not the cord-cutters cable companies have to fear but the bundlers.
Over our short history of standalone streaming options — until recently, anyway — if you wanted to forsake cable and still be able to watch Showtime or Starz, you had to sign up for each service individually.
Last week Amazon Prime changed that. The $99-a-year streaming service (which also includes non-video perks, such as free two-day shipping) announced that members now have the option of adding subscriptions from both networks.
In other words, Amazon is dipping its toe into the world of bundling.
Which means not only will viewers have access to an already existing back catalog of movies and TV series to go along with Amazon’s slate of original programming (including “Transparent,” which just debuted its second season), but also current programming from Showtime (with shows such as “Shameless,” returning for a sixth season Jan. 10 and due to film in Chicago next week) and Starz (which has a big hit with “Outlander”).
Both networks come with an extra monthly fee if you add them to your Amazon account, albeit at a discount — the stand-alone price for Showtime is $11 a month, compared with $8.99 through Amazon — but Amazon will also handle the billing. And you’ll watch everything through Amazon’s app or video player.
“Our view is that there’s a lack of convenience for consumers,” Amazon VP of digital video Michael Paull told The Hollywood Reporter. Ya think?
So what they’re offering is a streamlined one-stop-shop. All of it managed by Jeff Bezos for your convenience.
Amazon is also partnering with subscription services such as Comedy Central Stand-Up Plus (which streams standup specials from Amy Schumer and others) and one that I have yet to pull the trigger on but should: Acorn TV, which is stocked with new programs from the U.K. And this is only the beginning; more is on the way.
In other other words, Amazon is starting to look a lot like cable. The more things change, the more they stay the same. It may just be a first step, but it’s laying groundwork to simplify our streaming lives.
That’s actually what Apple TV has long been promising. But according to a report in Bloomberg, Apple has recently suspended those plans, likely because it hasn’t figured out a financial model that works for everyone involved: “Its plan to sell a package of 14 or so channels for $30 to $40 a month has run into resistance from media companies that want more money for their programming.”
Much as we gripe (legitimately, in my view) about ever-increasing cable rates — and much as some have pushed for an a la carte option (pay only for the channels of your choosing) — I wonder if there is a significant portion of viewers who gravitate toward the idea of a bundle, regardless of who is offering it. It’s just easier.
Sling TV, which streams live TV channels over the Internet for $20 a month (including ESPN, CNN and AMC), is giving it a shot. Dom Caristi, a professor in Ball State University’s department of telecommunications, calls the service a mini-bundle, or “cable light.” Last spring Sling TV (not to be confused with Slingbox) added HBO to coincide with Season 5 of “Game of Thrones” (for an additional fee — there’s always an additional fee).
“I believe absolutely that people want a simpler system, with one bill a month and be done with it,” Caristi told me. (Viewer experience on Sling TV has been mixed, with one poster on CNet noting that: “Unfortunately, anytime a show with a large viewership comes on, Sling completely craps out.”)
But the idea has legs. The more channels (or whatever we want to call them these days) you have bundled together, the more affordable they are. It’s economies of scale.
“The idea of a la carte cable was appealing to a lot of people on the premise that they would be able to save a lot on their cable bill because they only watch a handful of channels,” said Caristi. “But the problem with that was that the cost of each individual channel would go up, per subscriber, because you wouldn’t have everyone paying for it. Whereas if you bundle a package of channels together, you’re more likely able to offer them at a lower per-channel cost.”
And for now, at least, a la carte still exists as a streaming option for those who don’t want to buy into the bundle. You only want Showtime and couldn’t give a toss about Amazon’s programming? Then sign up for Showtime’s stand-alone streaming and be done with it.
In terms of market dominance, though, Netflix remains the champ. A recent report analyzed viewing during prime time hours and found that 37 percent of streaming is via Netflix, followed by YouTube at almost 18 percent. Amazon and iTunes are only clocking in at 3 percent, with Hulu and Facebook at a little more than 2 percent, according to the report. “Imagine if one TV network had more than a third of the market,” Caristi said of Netflix’s numbers. “It’s huge.”
Companies are trying everything at this point, he said. Which is probably why Amazon announced its new bundling options during the Christmas shopping season, when people are flooding the website and Amazon has their attention.
It’s also why Netflix is hinting that it will likely pursue live sports, but only if it owns and creates the event itself. “The leagues hold all the pricing power,” Netflix’s Ted Sarandos said at a recent media conference. Instead Netflix will look to emulate something like the X Games on ESPN, which were specifically developed by Disney, which also owns the event itself.
“Netflix beat everyone to the streaming party, so nobody wants to miss the next thing,” said Caristi. “I think everybody is afraid to be too late to the party.”