According to people close to Amazon.com, the company is considering the launch of streaming television and music-video service, which are to be supported by advertising.
The people familiar with the process revealed that Amazon.com has shared its idea of the new service, which could be released in the months yet to come, with its potential partners. They also said that the service might include original and licensed content and added that Amazon has started negotiations with some developers.
This decision comes after the company recently announced it had reduced the prices of its online-based (cloud) services, which provide users with the opportunity to use Amazons data centers resources of power or storage space. The cloud services prices are said by the company to be cut by about 51%. Amazon.com also revealed that it has decided to reduce the prices of other services by between 28% to 61% depending on the specific product.
The company also released a new service, which is called Amazon WorkSpaces and provides the customers with a desktop-like computing experience available on any device connected to the Internet without being obliged to use a particular machine in order to access specific applications.
Two people with knowledge of the companys plans revealed that Amazon.com considers releasing advertising-supported free music-video services as part of the companys strategy to enter the multimedia competition following the steps of some rivals such as Google Inc. and Netflix Inc.
The people familiar with the process said that it is still not clear how the advertising-supported content will be provided to customers, but there is a possibility for Amazon.com to create a special section on its website. According to data compiled by eMarketer, analysts forecast TV advertising to generate 68.5 billion on the territory of the U.S. in 2014.
One of the companys spokeswomen, however, rejected the rumour, saying: “Were often experimenting with new things, but we have no plans to offer a free streaming media service.”
Amazon.com Inc. fell by 1.44% on Thursday to close the session at $338.47, marking a one-year change of +27.85% and a market value of $155.45 billion. According to CNN Money, the 38 analysts offering 12-month price forecasts for Amazon.com Inc. have a median target of $437.50, with a high estimate of $500.00 and a low estimate of $330.00. The median estimate represents a +29.26% increase from the last price of 338.47.
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