Just a few days after Bloomberg Business reported that Amazon.com (NASDAQ:AMZN) was in talks with media companies, CBS (NYSE:CBS) CEO Les Moonves went on Bloomberg Television and said it's in talks to sell live content to Apple (NASDAQ:AAPL) and hinted at the potential for Facebook (NASDAQ:FB) and Netflix (NASDAQ:NFLX) to stream its content as well.
Currently, the options are limited for streaming live programming over the Internet, but from Moonves' comments it sounds as if consumers will have a lot more options than just their local cable company as soon as next year.
A differentiating factor
Acquiring the rights to live content could be a huge differentiator for Amazon or Netflix compared with all the other streaming platforms available. Amazon continues to invest heavily in its own original programming and licensed content to compete with Netflix for subscribers. Meanwhile, Netflix just disappointed investors with slower-than-expected domestic subscriber growth.
Getting the rights to stream some content live could give a boost to either services' subscriber numbers. Amazon has made deals in the past to stream shows such as Under the Dome and Extant with micro-windows of four days (probably so CBS could get the most out of Live +3 cable ratings). The other main broadcasters have deals with Hulu for next-day or next-week streaming, which makes it very compelling for TV junkies. More deals like those could be in the works for Amazon and Netflix.
Apple, meanwhile, views the potential for a live streaming service as another differentiating factor for its new Apple TV hardware. Amazon, too, has its own set-top-box, the Fire TV, which works pretty much like all the other set-top boxes. However, cable companies currently have control over the set-top box used to watch live programming. Live streaming services connected to the Apple TV or Fire TV could enable both companies to sell more hardware.
The most interesting note from Moonves' interview is that he mentioned that Facebook was interested in content. Facebook continues to push into video, focusing primarily on short-form clips and competing with YouTube. At the same time, Facebook has pushed into news with Instant Articles and a new breaking-news alert app called Notify coming out soon. Facebook may be interested in licensing clips from CBS's news programming, magazine shows such as 60 Minutes, and talk shows.
Watch out, cable
A growing number of options for streaming video is bad news for traditional pay-TV companies. Moonves seems convinced that streaming and a la carte are the future of television. Both CBS and Showtime, which CBS owns, have a la carte streaming options, which include the archives of both networks. And he believes a deal with Apple is probable for the future, and all the major networks are reportedly in talks with Apple as well.
Cable operators may need to push for slimmer bundles -- as some already have -- and the rights to stream content over the Internet both in and out of the home to compete with live streaming from major tech companies or rogue networks like CBS.
But CBS is different from most media companies. It has two broadcast networks, one premium cable network, and a couple of small cable channels. The cable bundle isn't as important to CBS as it is to the other major broadcasters and media companies. That may be why CBS is more willing to license its content to tech companies and go a la carte with CBS and Showtime.
Still, there's a lot of pressure mounting on cable companies as big tech names move into the streaming-video space. Apple may be the company to break the dam and let the floodgates of live streaming video open up to more consumers. When that happens, cable companies had better hold their breath.