Amazon to continue focus on Prime Channels build-out

Amazon said it plans to continue growing its Amazon Prime Channels service but would not speculate on whether it aims to take on pay TV providers by offering a ‘skinny bundle’ offering.

Speaking on the company’s second quarter earnings call, Amazon’s director of investor relations, David Fildes, declined to speculate on future plans but said the company is “really pleased” with the growth it is seeing with Prime Channels.

“We’ve seen some good channels come online over the last few quarters, and seen some good traction there,” said Fildes. “We’ll keep focusing on building out even better selection, because it’s clear to us that customers want that option to be able to add that content as part of their Prime memberships.”

The comments came in response to an analyst question asking directly whether Amazon “plans to offer standard skinny bundles to become a cable replacement?”  Currently users can add channels to their Prime subscription on an individual pay-monthly basis, rather than packaged together for a single price.

Amazon launched its channels initiative in the US in 2015 after teaming up with major TV networks and content makers like Showtime, Starz and AMC. The US has seen a rise in ‘skinny bundle’ offers in recent years with the launch of services like YouTube TV, Hulu With Live TV, and operator offerings like DirecTV Now.

In Europe, Amazon launched its Channels scheme in May 2017 in the UK, Germany and Austria. Among the channels available in these markets are Discovery, Eurosport Player, Hayu, Mubi and Cirkus.

Prime Video Channels also launched in the past quarter in Japan and reports from earlier this year claimed Amazon is mulling a launch of its à la carte pay TV offering in France.

Amazon also continues to launch its broader Amazon Prime offering in new geographies, recently rolling this out in Australia. It is also launching its hardware in more markets.

“We launched Echo and Alexa in France, the Echo Spot in India and Japan, and we announced that we’re going to expand Echo and Alexa soon to Italy, Mexico and Spain. I would say that we’re continuing to front-load Prime benefits in the newer geographies,” said Amazon’s chief financial officer on its Q2 earnings call.

Overall for the quarter, Amazon reported a 39% increase in net sales to US$52.9 billion, compared with US$38.0 billion in the second quarter of 2017.