Amazon is developing a free and ad-supported streaming video service, according to a new report out now from AdAge, citing people familiar with the plans. The company is said to be in discussion with various studio and TV networks to provide content for the service, which aims to give content creators their own channels where ad revenue would be shared with Amazon.
This is not the first time Amazon has been reported to have something like this in development, however. Back in 2014, the company was also rumored to be working on a very similar project – that is, a free video service that sits alongside the existing Prime Video offering that’s bundled with an annual Prime Membership.
In the past, Amazon has also denied these reports, we should note.
[Update, 5:03 PM ET – Amazon has now denied AdAge’s new report, as well]
But now may be the time for Amazon to delve back into this space, given the rise of live TV streaming services like Sling TV, DirecTV Now, PlayStation Vue, YouTube TV, and Hulu Live TV, for example. These services are appealing to cord cutters (and “cord nevers”) who are still interested in watching traditional cable TV programming and their broadcast stations, instead of entirely relying on video-on-demand services, like Netflix.
In addition, other major players from across the tech industry are beginning to heavily focus on their video offerings, too, as with the launch of Facebook’s video hub, Watch, and Apple’s move into original content.
If Amazon were to offer free streaming TV and movies, it could attract a wide audience that Amazon could then attempt to upsell by encouraging them to join Amazon Prime – one of the benefits being, of course, that they could ditch the ads when streaming favorite shows.
Amazon has been expanding its video investments in recent months, including with an expansion of Amazon Studios, which is moving to a new HQ in Culver Studios, L.A. and adding staff. The company is also expected to spend nearly $5 billion on content this year.
According to AdAge, Amazon may be promising to link payments for content based on the number of hours watched by viewers, and may share audience info alongside ad revenue. (The report notes that Amazon didn’t comment on this. This evening, Amazon again supplied the following comment, as it did back when the original reports came out: “We have no plans to create a free, ad-supported version of Prime Video,” a spokesperson said.)