Amazon Could Soon Offer Live TV With Prime Video

Amazon is looking to expand its Prime Video offering. Apps that offer live programming have been growing in popularity, particularly during COVID-19.
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Amazon is looking to build out its Prime Video service with live programming, according to a report. 

Job listings and industry sources indicate that Amazon could be adding 24/7 live news, sports, music and scheduled movies and programs to Prime Video. One listing described the initiative as a "next gen linear catalog...to provide best-in-class Linear TV experience," as first reported by Protocol

Amazon  (AMZN) - Get Report shares closed 0.74% higher on Thursday to $2,754.58.

The ecommerce giant has been tinkering with live content for awhile. It recently expanded a deal with the NFL to stream a Saturday game, in addition to Thursday night games. It also started offering select news streaming channels through Fire TV devices last year. 

Adding live TV to Prime could help Amazon stand out in an increasingly crowded marketplace for on-demand video. 

Free apps that replicate the linear TV experience have seen a spike in engagement of late, particularly in the COVID-19 pandemic: A recent analysis by App Annie found that in May, Pluto TV and Spectrum TV, both of which offer live programming, surged in downloads

Cord-cutting has also accelerated this year, with major U.S. pay TV providers losing 2,065,000 net video subscribers in the first quarter, according to Leichtman Research Group, a research firm focusing on broadband, media and entertainment. Those net losses were higher than in any other previous quarter. 

With a live TV offering, Amazon could capture a piece of the valuable pay TV market, which is estimated at $225.9 billion globally. And it could help to kickstart growth in Amazon Prime memberships, which analysts view as an important linchpin of Amazon's valuation potential. 

Prime Video is bundled with $119 per year Amazon Prime memberships.

Writing in a recent note, Needham analyst Laura Martin estimated that Amazon's media businesses alone are worth approximately $500 billion, or 38% of Amazon's total value. Over the long term, Amazon could reach $4500 per share, Martin wrote, based on the overall value of Amazon's growing service ecosystem. 

"Adding groceries, video, Twitch, music, etc. to Prime keeps subs in AMZN's ecosystem 3 extra years and grows LTV [lifetime total value] by 50%," she wrote. 

Shares of Amazon have risen 45% year to date. 

Amazon is a holding in Jim Cramer's Action Alerts PLUS member club