Amazon plots the launch of free TV channels: Online giant’s new threat to ITV and Sky

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Amazon is plotting a fresh attack on traditional broadcasters with the launch of free channels on its Prime Video service.

In a move that could put it in direct competition with commercial broadcasters ITV, Sky and Channel Four, it would offer programmes at no cost, potentially funding them through adverts.

Its plan emerged in a job advert for a new London-based ‘head of free to air TV and advertising’.

Currently Amazon offers a TV service through its website, which is available to its Prime members who pay £79 a year to access thousands of shows and films.

Amazon is said to be considering launching a free TV channel funding programmes through adverts shown during shows

Amazon is said to be considering launching a free TV channel funding programmes through adverts shown during shows

Through Prime, customers can access other channels as add-ons, such as HBO, Discovery and Eurosport, as well as more niche offerings such as Horse & Country Play.

There is also a small number of free channels, such as ITV Hub, supported by adverts. Amazon says it now wants to expand the number on offer, possibly by striking agreements with broadcasters across Europe.

The move marks a major step in the company’s ambition to make more cash from advertising.

And analysts say it paves the way for a showdown with traditional broadcasters over who deals with advertising clients and gets the biggest slice of revenues.

So far Amazon has featured only a limited number of commercials on Prime. A major target for adverts is thought to be the rights it has bought to 20 Premier League football games next year.

Netflix becomes no. 1 

Netflix has become the most viewed channel in America, research has found.

Wall Street analysis firm Cowen & Co said 27 per centof adults said they used the service ‘the most often’ to watch content on television. 

About 20 per cent said they used cable, followed by traditional broadcast at 18 per cent and YouTube at 11 per cent.

In the UK, video streaming is now estimated to account for 16 per cent of all TV set activity.  

Tom Harrington at Enders Analysis said: ‘Amazon has offered its channels service for a while but what this would do is expand their offering.

‘They will likely be looking to strike more partnerships across Europe with free-to-air broadcasters.

‘The next obvious step would be for Amazon to then deal with the advertising end of things, selling the ads that appear alongside content that appears on Prime.

‘But broadcasters like ITV, the BBC and Channel 4 are very worried about the growth of Amazon and Netflix and they will not want to run the risk of giving up their relationships with advertisers.

‘I imagine they will be reticent about the prospect of any deals like that, even though it could be easy money at a time when revenues are under pressure.’

Amazon declined to comment on the job advert or the rumours of a free service. However, chief executive Jeff Bezos has said he sees the Prime Video service as a way of boosting sales.

In 2016 he said: ‘When we win a Golden Globe, it helps us sell more shoes. Because if you look at Prime members, they buy more on Amazon than non-Prime members. 

‘A lot of their behaviours change in ways that are very attractive to us as a business.’ Amazon’s results for the three months to March 31 this year revealed it made £1.5billion from advertising – more than double during the same period the previous year.

At this week’s annual meeting of ISBA, which represents British advertisers, , Sky UK boss Stephen van Rooyen claimed he did not see online video services such as Amazon and Netflix as a threat but as potential partners.

He said: ‘Our job is to bring customers choice. So if Netflix brings thousands of hours of content to our customers then we are happy about that.’

 





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