Amazon TV Exec Wants More Options for More Viewers at a Price

May 16, 2018

By Christian Smith

As more people ditch their TVs, cut cable, and go over the top for their favorite shows, television producers, and tech executives are looking for new ways to get their shows on viewers' screens, no matter the size.

"There are just different audiences who want to interact with video and entertainment in different ways," said Richard Au, the director of Amazon's over the top TV service.

Over the top, or OTT, refers to television streamed through services or devices outside the broadcast-cable setup, and it's one of the fastest growing sectors in media. OTT is the millennial generation's alternative to cable, offering cord-cutters the channels they want through internet-based platforms.

Though more people still get their TV the old-fashioned way, through cable, than from OTT platforms, ad dollars are starting to shift. The New York Times said that total TV ad spending peaked in 2016 at about $70 billion, according to eMarketer, and it is expected to decline. Digital ad spending meanwhile is skyrocketing, reaching about $90 billion in 2017.

Dish was one of the first pay-TV providers to launch its own OTT service, Sling, two years ago. It has about 2 million subscribers, according to a report by ABI Research, compared with 1.2 million for DirecTV Now, a rival that started a year later.

YouTube and Hulu launched their own live-streaming services this year for about $40 per month. Other live OTT services include Philo, PlayStation Vue, fuboTV, and CBS All Access.

Though many companies are offering bundles of channels for a monthly price as an alternative to cable, Amazon has taken a different approach. Its Prime customers are able to subscribe to channels like HBO, Showtime, and Starz individually, paying for each channel. An HBO subscription on Amazon costs about $15 a month, the same as HBO NOW.

In an interview Tuesday with Cheddar at The Pay TV Show conference in Denver, Au said Amazon's platform is designed to give Prime users access to more content in one place.

"You're not needing to go download a separate app and then log in, create an account, or do anything like that," he said. "As long as you're recognized in your Prime Video account you can go and, one click, start watching."

The television producers and tech executives at The Pay TV Show this week are all trying to make their content and services more accessible to viewers, and they're looking for new OTT distribution deals to maximize their exposure to new audiences. Au said Amazon would consider a deal with cable providers to offer subscribers the Amazon Fire TV stick as a way to grow in television.

Content providers are also looking to expand their reach, considering deals with OTT platforms like Apple TV and Roku. Acorn TV, the largest distributor of British, Australian, and Irish content in the U.S., has done just that and is quickly approaching the 1 million subscriber mark.

"You have to carve out your niche so you can afford the rights to that niche," said Acorn TV's senior vice president and general manager, Matt Graham.

If the evident trend at The Pay TV Show is any indication, consumers can expect to see more content on a greater number of platforms in the next couple of years. And though its impossible to say if or when OTT may overtake cable, it's certainly growing.

For the full interview, click here.