Amazon.com (NASDAQ: AMZN) is launching their own streaming video service, according to reports this week. And in other news, Apple Inc. (NASDAQ: APPL) is strengthening their ties to the current champion of home video delivery Netflix (NASDAQ: NFLX) in a new partnership. Then there’s the pending fall launches of a Google Inc. (NASDAQ: GOOG) streaming TV software platform this fall.
Digital delivery of entertainment is no longer the growing trend, as these headlines show, but the business of right now. Just months ago television networks and movie studios were scrambling to catch up with an audience that had disappeared from theaters and broadcast networks in favor of the Internet. But they now appear to be getting their business plans in order.
Welcome to streaming video Manifest Destiny, as stocks race to stake their claim. And here’s the latest news: A report from today’s Wall Street Journal says that Amazon.com has approached Viacom (NYSE: VIA), News Corp (NYSE: NWS), General Electric (NYSE: GE) network NBC Universal, and Time Warner (NYSE: TWX) among others about supporting a new subscription-supported, Web-based streaming video service the company has been working on. Amazon’s proposed service is similar to a number of existing and in-development services that are all trying to curry favor with the same content providers. It is particularly similar to Hulu, the website and streaming video joint venture that is actually owned by NBC Universal, News Corp, and Disney Co. (NYSE: DIS) property ABC. Hulu, which was purely an ad-supported video Website until this summer, just launched its paid subscription plan Hulu Plus on a number of platforms, including the Apple Inc. (NASDAQ: APPL) line of popular mobile devices.
Apple has reportedly been working with those same partners to revamp its own presence in the streaming video marketplace. A much-rumored re-launch of the Apple TV service and hardware is expected from Apple’s media event today, including the announcement of 99 cent, one-time video rentals of programming from News Corp’s Fox and Disney’s ABC. It’s been rumored that Apple has been developing a much more aggressive entry into the streaming video space rather than just updates to current offerings on their iTunes store, but they have reportedly met with resistance from content providers, both in television and film. Executives from all walks of video entertainment are concerned about cannibalizing the multiple outlets already hosting their content. With the similarities between Amazon’s proposed new service, Hulu, and existing player Netflix, they’re right to be concerned.
Netflix is making news today as well, with word that Apple’s new video plans might include a reinforced partnership with the video rental service. A report at Bloomberg says that Netflix will offer instant video streaming to their subscribers through Apple’s new Apple TV set top box when it releases later this fall. Netflix already offers instant streaming through a variety of living room technology, namely gaming consoles like the Microsoft (NASDAQ: MSFT) Xbox 360.
Content providers will also need to consider users accessing Amazon and Hulu’s services in the living room if Google Inc. (NASDAQ: GOOG) and its new Google TV-enabled set top boxes are successful. Google TV, a powerful search engine included in set top boxes from Sony (NYSE: SNE) among others, allows users to search the entire Web for video content in addition to broadcast and established streaming services like those on networks’ websites, Netflix, and Google’s own YouTube, which began offering a variety of older movies for free this past week in anticipation of a new pay-per-view service to launch later this year.
Digital delivery may be the new norm for video content, but television networks and film studios alike are going to need to be concerned with more than just getting their product to the audience. As more and more services like Amazon.com’s are unveiled, they’re going to have to find a way to properly organize their delivery method.
Otherwise, potential profits will fade away as quickly as physical media has.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
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