Amazon: Virtual MVPD in the Making?

Starts bundling Starz, Showtime with Amazon Prime’s video service
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Showing signs that it’s interested in becoming a “virtual” multichannel video programming distributor, Amazon last week unveiled a new program that bundles in over-the-top pay services, including access to Starz and Showtime, on top of its base Amazon Prime subscription.

Amazon, which had been rumored to be discussing live-TV deals for months, now offers a slate of add-ons through a new Streaming Partners Program. Under that program, Amazon handles several key elements to get services rapidly spooled up with Prime, including subscriber acquisition, customer service, content delivery and device management.

Early on, the offering will feature dozens of add-on subscription services, including Acorn TV, Comedy Central Stand-Up Plus, Lifetime Movie Club, AMC’s Shudder and CuriosityStream.

As for Showtime and Starz, Amazon will bundle those premium video services for a monthly $8.99 each for subscribers to the $99-per-year Amazon Prime service. The Starz offer will provide a VOD library, plus a live feed of Encore and six live Starz multiplex feeds. Showtime’s Amazon offering includes VOD from Showtime and The Movie Channel, plus Showtime’s East Coast live feed.

Speaking last week at a UBS investor conference in New York, Starz CEO Chris Albrecht said the Amazon deal, which is under a wholesale agreement, mirrored a traditional pay TVdistribution pact in many respects.

“We see there being a lot of energy coming into the category of selling video, and I think this [deal with Amazon] highlights the value of premiums,” he said. “I think this points out, again, how premium has always pulled through customers to other platforms, whether it was cable customers or whether it was satellite customers or whether it was telco customers. And now we’re seeing maybe one of the world’s greatest retailers, who’s going to be selling premium on top of what really is their core business.”

Albrecht, who has been dropping hints about Starz’s OTT ambitions, said the premium programmer will have more in store. “We are considering everything … We’re being careful in the decisions that we make because what we want to do is, honestly, have our cake and eat it, too.”

For Amazon, integrating Prime with other services, could perk up its own video platform, which has been lagging chief OTT rival Netflix in usage levels (see Next TV).

“There’s money to be made for Amazon here,” Colin Dixon, analyst and co-founder of nScreenMedia, said. “They have been experts at integrating third parties into their retail store … This is really an extension of that sort of thing, but in the video domain.”

The early implementation is a bit clunky, though, Dixon said. When a user signs up for Starz or Showtime via a Fire TV device, he or she is redirected to a website to complete the transaction, he noted. “Implementation is everything. It won’t resonate with consumers until they get it fixed.”

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