Content Owners Say Amazon Is Considering A Live OTT Streaming Service
Over the past few months, multiple content owners have told me that Amazon has been quietly asking them about licensing content for a live streaming service. While none of the content owners want to go on record, or will discuss how far along Amazon is with their plans, other companies involved in the video ecosystem also confirm that Amazon is looking at potentially offering a live OTT video service of some kind.
Considering Amazon already offers an on-demand Prime Video streaming service, it’s would not be surprising that they would also look at the economics of offering live content, just like every other OTT provider is probably doing. But what makes this Amazon story even more interesting is that Amazon recently agreed to acquire Elemental Technologies, a company that offers a cloud-based platform for ingesting, encoding, protecting and packaging live linear streams. While Amazon has already confirmed they plan to integrate Elemental’s live linear platform into their AWS platform and offer it as a service, acquiring Elemental will also give Amazon their own in-house platform needed to make an Amazon branded live OTT service possible.
This also might explain why Amazon would pay so much for Elemental, with rumors of the sale price valuing Elemental at $500M. (Note, I haven’t been able to confirm the $500M number is accurate) Updated Oct. 23: Thanks to an SEC filing, we now know Amazon paid $296M for Elemental, not $500M like The Information was reporting. In 2012, Elemental disclosed they did $21M in revenue. In 2013, revenue grew to $32M and in 2014, revenue was projected to be over $50M. Insiders say Elemental is on a run rate to do close to $100M in 2016. So if the rumors of Amazon valuing Elemental at $500M are correct, Elemental is getting about 5x projected 2016 revenue, a rather high valuation, unless Amazon is also placing value on them for other reasons, like the ability to power their own live OTT service.
Those I have spoken with haven’t disclosed how far along Amazon is with regards to a live OTT service and it’s possible Amazon is simply looking at the economics of the business, which would involve them talking with content owners about costs. That alone is no proof that they plan to bring a live OTT service to the market anytime soon, but the purchase of Elemental adds to the intrigue and it could be that Amazon is doing more than just thinking about a live OTT service.