Amazon.com Inc (NASDAQ:AMZN) is planning to expand its online video business and it is considering the possibility of offering its own pay-television service, according to Wall Street Journal based on information obtained from people familiar with the issue.
According to the sources, the e-commerce giant spoke to entertainment companies in the United States regarding licensing televisions channels for a potential new online pay-TV service. Amazon.com Inc (NASDAQ:AMZN) aims to offer live television programming, which are currently available on cable and satellite TV.
The Prime Instant Video service of Amazon.com Inc (NASDAQ:AMZN) is now offering different movies and TV shows on demand for its Prime subscribers who also receive free-two day shipping on millions of items sold at its website.
People familiar with issue said it is still uncertain whether Amazon.com Inc (NASDAQ:AMZN) will push through its plan. The Wall Street Journal previously reported that the e-commerce giant is developing a set-top-box to stream videos.
Amazon denies plans to license TV channels
Amazon.com Inc (NASDAQ:AMZN) issued a statement regarding the issue. According to the e-commerce giant, “We continue to build selection for Prime Instant Video and create original shows at Amazon Studios, but we are not planning to license television channels or offer a pay-TV service.”
Cantor Fitgerald analyst, Youssef Squali said Amazon.com Inc (NASDAQ:AMZN) spent approximately $1 billion in content last year. In addition, the company also invested in streaming video, mobile devices, grocery deliveries and other initiatives that negatively impacted its profit margins.
Other the online-pay TV service entrants
Sony Corporation (ADR) (NYSE:SNE) and Verizon Communications Inc (NYSE:VZ) are also planning to launch its own online pay-TV service. Verizon agreed to acquire the assets of Intel Media, a business unit of Intel Corporation (NASDAQ:INTC) that develops Cloud TV product and services including the OnCue platform.
Amazon.com files patent
The e-commerce giant recently filed a patent entitled “Method and Systems for Anticipatory Package Shipping.” Amazon.com Inc (NASDAQ:AMZN) aims to deliver products before a customer place its order. The patent indicated that the company is trying to learn the behavior and buying patterns of consumers to be able to make a speedy delivery.