Amazon.com has scrapped plans to start an online streaming program bundling popular U.S. broadcast and cable systems since it believes it cannot help to make enough funds on such something, people familiar with the problem told Reuters.
The world’s most significant online retailer in addition has been struggling to convince key broadcast and basic cable networks to break with decades-old business models and join its a la carte Amazon Channels service, the sources said and has backed away from talks with them.
The reversals come a month after the abrupt departure of Roy Price from his job as head of Amazon Studios, the company’s high-profile tv set production division, following an allegation of sexual harassment, which he has contested.
They show how difficult it really is for Amazon to change entrenched habits in the U.S. entertainment business in the same way that it has done in retail, cloud computing and other areas.
An Amazon spokeswoman declined to comment.
Video has become an essential tool for Amazon found in generating subscriptions for its U.S. $99-a-year Prime membership program. It is on track to invest some $4.5 billion or more on video programming this year, analysts estimate.
On Monday it produced waves in the entertainment community with the purchase of global tv set rights to “GOD, THE FATHER of the Rings,” planning for a multi-season series to pull more viewers to Prime.
Simultaneously, Amazon is looking to offer a wide variety of tv set channels through Prime. It actually aimed to offer a limited bundle of key broadcast and cable systems for a set payment, related to offerings from Alphabet Inc’s YouTube and Hulu.
Such an offering, noted in the market as a “skinny bundle,” is a means of capturing younger viewers who are dropping traditional, expensive cable or satellite TV packages in favor of channels watchable on smartphones and tablets.
But in recent weeks, Amazon didn’t move ahead with something on the grounds that it could yield too low a profit margin and didn’t necessarily indicate the direction it business will eventually move, the sources told Reuters.
Amazon could still decide to change study course and introduce a skinny bundle, but the talks are over, the sources said.