Double denial in another busy week at Amazon HQ

It would be refreshing to write an issue without a single mention of Amazon, was it not for the fact that on a weekly basis the company makes moves which are shaping and defining almost every angle of the video market and associated technologies.

The tech titan was tied to three significant news pieces this week – a rumored venture into an ad-supported video offering, acquiring rights for an original Lord of the Rings TV series, and the controversial sale of some AWS assets in China.

To the reports of an ad-supported Amazon video service first, which claimed the company has been in talks with major studios, TV networks and media companies, but this was swiftly denied by Amazon representatives after initial publication by Advertising Age in the US. If we can take anything from this quick turn of events, it is that somewhere inside Amazon, a team is brainstorming a way to tap into the advertising industry – and no doubt achieving that success in the video streaming market will be the team’s primary objective.

A free Amazon video streaming service would likely attract enough viewers around the globe that Amazon could gradually claw a small share of ad revenue away from Google and fuel a fierce battle in online advertising. An onslaught against YouTube would surely be out of reach, but it would certainly give Google and Facebook cause for some concern.

Nevertheless, Amazon claims the venture isn’t to be, as spokeswoman Cat Kelty told FierceCable, “We have no plans to create a free, ad-supported version of Prime Video.” Like Netflix, Amazon has swerved putting advertisements into its content, with the exception of NFL games, suggesting that, if Amazon looks to revisit an ad opportunity, sports will be at core of anything it does and it won’t be built around Prime video.

The rumors emerged after an anonymous Amazon representative told Ad Age that the company is eying ad-sharing revenue opportunities. The statement said, “Amazon is talking about giving content creators their own channels, and sharing ad revenue in exchange for a set number of hours of content each week.”

Meanwhile the turbulent political system in China has caused some uncharacteristic scrambling from Amazon, as it issued a statement about its AWS cloud operations after several major news outlets reported it had sold off the entire AWS business in China, which we imagine would have gone for a tidy fortune, not the $300 million that the company’s partner Beijing Sinnet reported to investors.

Amazon released the following statement, “No, AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS’s industry leading cloud services. Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services. As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner and AWS seller-of-record for its AWS China (Beijing) Region. AWS continues to own the intellectual property for AWS Services worldwide. ‎We’re excited about the significant business we have in China and its growth potential over the next number of years.”

The scale of the AWS assets sale has not been publicized, but we bet that investors at rival cloud technology companies in China, namely Alibaba and Tencent, are relieved that the might of Amazon is restrained from making its mark on China to the same extent as the rest of the world. They can thank China’s new cybersecurity regulations for that, laws which were officially implemented in June this year to restrict foreign influence on Chinese businesses.

A much simpler announcement for Amazon this week, but no less significant, is that the company is producing its own Lord of the Rings TV series on Prime Video – finally confirming the long-rumored adaptation of the J.R.R. Tolkien’s novels in a rights deal valued at $250 million. Perhaps timing the launch between seasons of Game of Thrones or after the grand finale would be a wise move, to fill the fantasy void left in its absence for millions of viewers, although no estimated release date has been mentioned.

The new project will be fronted by Amazon Studios Head of Scripted Series, Shorn Tal Yguado, who said, “The Lord of the Rings is a cultural phenomenon that has captured the imagination of generations of fans through literature and the big screen.”

Matt Galsor, a representative for the Tolkien Estate and Trust and HarperCollins, said, “Amazon, with its longstanding commitment to literature, is the home of the first-ever multi-season television series for The Lord of the Rings. Sharon and the team at Amazon Studios have exceptional ideas to bring to the screen previously unexplored stories based on J.R.R. Tolkien’s original writings.”