Amazon.com (NASDAQ:AMZN) recently launched its Streaming Partners Program. The company will soon be offering its Prime members access to content from networks such as Showtime, Starz, and AMC, as monthly add-ons to their annual Prime subscription.

This initiative will push Amazon further into direct competition with traditional cable and satellite companies. It could prove to be a major windfall should the company's nearly 50 million Prime customers opt into the service. In the meantime, analysts Vincent Shen and Sean O'Reilly break down the new offering and what investors can expect.

A full transcript follows the video.

 

This podcast was recorded on Dec. 8, 2015.

Sean O'Reilly: Also some big news out of Amazon. They announced, and apparently my Prime subscription's about to get a little bit more valuable. So what's going on, real quick?

Vincent Shen: Sure. So there had been rumors about this over the past couple of weeks, I think, where people were basically hearing that Amazon would be offering its own or offering through its Prime TV service subscriptions to other well-known video services, networks, premium networks even, and then potentially selling prepackaged bundles of its own to further the cord-cutting movement, I guess.

And that's been officially confirmed today, with the company basically announcing its streaming partners program. So as part of Prime TV, now you can also sign up for subscriptions to networks like Showtime $8.99, Starz $8.99, Sundance now $6.99, Comedy Central Standup $3.99. A whole bunch of different other content.

O'Reilly: And those are sizable discounts, as I understand it, to what you would have to pay for a streamed subscription to Showtime or Starz, which is actually about 11 bucks.

Shen: Yeah.

O'Reilly: So these are very decent prices.

Shen: So you're saving a couple of dollars per month, absolutely, if you do it through Amazon, and there's definitely some other perks there, too.

O'Reilly: Now, this isn't to be confused with Amazon's -- they're just in talks to do this -- but I wanted to point out, this isn't to be confused with Amazon's plans to try to get major networks to do a streaming Internet service to literally directly compete with cable channels.

Shen: Oh, yes, so ...

O'Reilly: Cable companies, I should say.

Shen: There are, of course, some of the rumors behind that as well. Still, we still haven't heard any new rumblings of that. But at the same time, yeah, it should definitely be noted that this streaming-partners program does not include live television.

O'Reilly: Yeah, and my understanding, just the last I heard, was they had reached out to ABC and NBC and everything, but it's kind of awkward because NBC is, of course, owned by Comcast, which doesn't want to lose the cable subscriptions. But on the other hand, and one of the reasons Showtime and Starz are probably doing a discount for the subscriptions that's actually been announced, Amazon Prime has 45 million members. That's a big enchilada.

Shen: So I think that's what I would consider to be the first major reason why networks would want to sign up for this streaming partners program. Because when you think about it at first, I personally would be a little bit concerned when you have -- because the thing is here, and Amazon mentions in the press release -- is that they will be managing a lot of things for their video provider.

So that includes driving subscriber acquisition, handling customer service, managing billing, serving the content obviously, managing compatibility across a lot of different set-top boxes and other devices. So you're really handing over the reins essentially to Amazon entirely. But the perks there also, they are managing all those things, right? They are giving you access to what you said, about almost 50 million of its Prime members, and you know, I think another issue is that for a lot of these smaller services, like, Showtime has its own streaming service, right?

The problem is that it's hard to break into that top three, four, five, where you already have Hulu, you already have Netflix, you have Prime TV, you have HBO Go. And if you're one of these small services to break into that, to get access to that same kind of subscriber numbers, this immediately puts you in a position to benefit from that exposure with Amazon, of course. And it will be really interesting to see just how many people sign up.

They're offering a lot of free trials for every single network so that, you know, these are obviously the costs are on top of your $99 annual Prime payment. But it's on a monthly basis. It will be really interesting to see what kind of numbers they get and how successful this is for Starz even. And this is their first rollout of a streaming service at all. And they're doing it in conjunction with this Amazon program.

Sean O'Reilly has no position in any stocks mentioned. Vincent Shen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com, AMC Networks, and Netflix. The Motley Fool recommends Starz. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.