Telefonica Seeks to Add Amazon Video to Services

(Bloomberg) -- Telefonica SA is in talks with Amazon.com Inc. to add Prime Video streaming to its phone, TV and internet packages, part of an effort to keep customers hooked on the Spanish carrier’s services, according to a person familiar with the plans.

By offering premium video-on-demand rolled into Telefonica’s services, the company aims to spare customers the hassle of subscribing to content separately. The move also helps ensure that users become more reliant on its packages, said the person, who asked not to be identified because the deliberations are private.

The push to offer more content to its subscribers follows a similar agreement with Netflix Inc. in May for Europe and Latin America. Telefonica is now in talks with several other streaming services, including Amazon Prime, for deals that would cover certain markets, said the person.

Representatives for Telefonica and Amazon declined to comment.

Telefonica shares declined 0.5 percent to 7.31 euros at 10:24 a.m. in Madrid. The stock is down 10 percent this year.

Carriers and pay-TV companies once viewed streaming services that let users watch hit TV shows on demand as an existential threat. Telefonica Chief Executive Officer Jose Maria Alvarez-Pallete is now seeking to hold onto subscribers by offering them the best content, whether it’s produced in-house or not, even as Telefonica plows money into its own original Spanish programming.

For Amazon and Netflix, this type of deal offers possible speedy access to millions of viewers who hadn’t already signed up independently for their services. Customers accessed more than 350 million services at Telefonica, across all markets as of June 30, with some subscribers using several services.

Telefonica isn’t alone in embracing streaming rivals. Comcast Corp., the No. 1 U.S. cable provider, said this month that it’s adding Prime Video to the content available on its Xfinity X1 set-top box, building on services from Netflix, YouTube and Pandora Media Inc. that were already available. In Europe, Sky Plc and Liberty Global Plc’s Virgin Media have deals with Netflix to let customers add the streaming service onto their other subscriptions with the companies.

To contact the reporters on this story: Rodrigo Orihuela in Madrid at rorihuela@bloomberg.net;Fabiola Moura in Sao Paulo at fdemoura@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Kim Robert McLaughlin, Nick Turner

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