According to The Wall Street Journal, Amazon.com (NASDAQ:AMZN) may beef up its Prime streaming TV service to include live programming in an effort to disrupt the cable and satelliate industry. Fool contributor Tim Beyers says it's the first in what could be a high-stakes bandwidth war.
At issue are recent changes to the net neutrality rules, Tim says in the following video. Top tier TV distributors such as Time Warner Cable tend to bundle Internet service as part of their offering. Now, with softer requirements regarding net neutrality, they're in a position to hike fees on those who consume the most bandwidth. Think not only Amazon, but also Netflix and Google.
In teasing the idea of an online TV service, Amazon is threatening Time Warner Cable and its peers, whose profits are heavily influenced by broadcast and cable television retransmission fees. Giving programmers more distribution options could put pressure on what channels might be willing to pay the incumbents.
For its part, Amazon told the Journal that it doesn't plan to license programming or build a pay TV service. Fair enough. The mere threat of action may be enough to keep cable and satellite operators from gouging the big bandwidth consumers, Tim says.
Do you agree? Would you sign up to watch an Amazon-led pay TV service were it offered to you? Please watch the video to get Tim's full take, and then leave a comment to let us know whether you would buy, sell, or short any of the stocks mentioned in this article.