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Old 17-12-2018, 20:11   #4863
OLD BOY
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Join Date: Mar 2008
Location: Wokingham
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Re: Netflix/Streaming Services

Quote:
Originally Posted by Chris View Post
The problem here is not what could be done, but whether the vendors consider it to be in their interests. Just because you can describe a package, doesn’t mean Amazon would want to do it.

Amazon’s strategy is bundling as many services as possible into Prime membership in order to build a loyal customer base. As a Prime member, you only have to have a mild grumble at them in the event of a late delivery in order to get another month’s free membership. They sell their smaller tablets almost at a loss because it gives them another way of showcasing their services to potential new subscribers. That’s how badly they want Prime members to stay Prime members.

So yes, they absolutely could make a carriage deal with Virgin Media. But are they going to? No, they are not. It would undermine a strategy they have thrown many millions of dollars at. Ultimately, OB, these things are determined by cold, hard business considerations, not the utopian dreams of a couch potato.
Of course they are, and it may well be that Amazon isn't interested in such an arrangement, but that was just an example of a different approach.

However, it is likely that Amazon would be happy to do a wholesale deal with Virgin, even on the basis of what they currently offer their customers. On the basis of, say, 5% commission, Virgin would stand to make about £4m from Amazon alone, assuming that there were, say, 1m customers on the Full House package. Multiply that by the number of additional streaming services coming our way and Netflix, and that provides a reasonable sum of money, half of which could be used to discount the amounts charged to customers.

This would be a good strategy to avoid the potential downsides of content reduction on the pay channels that muppetman was referring to, and of course this would be at a time when the number of pay tv channels are likely to be dropping back as well, meaning less cost for Virgin's TV service.
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