Amazon is launching a new service for members of its Prime Video subscription service in the U.K. and Germany allowing them to watch live television broadcasts, in a bid to better compete with its rivals.
The service Amazon Channels, which was previously launched in the U.S., allows customers to pick and choose subscriptions from a list of 40 different channels, including Discovery, MGM, and Eurosport Player, without having to sign up for a bundle of programs or enter a long contract.
This a la carte business model differs from the subscription bundles offered by premium TV providers such as Sky. Meanwhile, Amazon's main streaming rival, Netflix, has no plans to offer live TV.
"For the first time, Prime members in the UK and Germany will be able to choose to watch premium TV channels without having to sign up to a bundle or a contract, giving them the freedom to pay for only what they want to watch," said Alex Green, managing director for Europe of Amazon Channels, in a press release.
The move will be highly disruptive and will threaten Sky's dominance in the pay TV market in Europe, according to Paolo Pescatore, director of multiplay and media at CCS Insight.
"Beyond free to air services, the addition of Discovery's channels is hugely significant. This is the first time that its channels have been made available outside of the Sky universe and out of a bundle," he said in a press comment.
"In our opinion, this will force many households to think twice about their pay TV subscription and cut the cord as we've seen in the US. Especially if Amazon will add more live TV such as sports in the future."
The move by Amazon will also allow it to continue to compete with Facebook, which is investing heavily into live video. Facebook recently signed a deal to live stream 20 Major League Baseball games, while in April, Amazon bought the streaming rights for Thursday night National Football League games.
However, Pescatore warned that the a la carte system offered by Amazon may confuse and frustrate customers. CCS Insight predicts the trend of TV programming delivered via the internet will see a return of large content bundles.
"There's been a rush toward online video services and so-called 'skinny' bundles, accompanied by a proliferation of separate apps for each provider. But in reality, customers will not want to sign up to numerous services, receive more bills and be forced to open several apps to find the content they want," he said.
"In our view, the disparate and disjointed nature of these apps will lead frustrated customers to reengage with big content bundles delivered over internet connections."