Heading off disruption: Amazon and virtual coins, ABC and live streaming

Talk about trying to disrupt the (possible) disruptors. Amazon has launched its own “bitcoins.” And TV network ABC will live-stream its shows on its app for Apple’s iPhones and iPads.

• First, what’s this about Amazon and bitcoins, a controversial cash substitute? Actually, the giant online retailer has just introduced its own digital currency, Amazon Coins, whose existence it announced earlier this year. The coins are good for purchases in the Appstore and for the Kindle Fire tablet, but  according to today’s announcement, Amazon has bigger plans. “We will continue to add more ways to earn and spend Coins on a wider range of content and activities — today is Day One for Coins,” said Mike George, Vice President of Apps and Games at Amazon.

The company is touting Coins, worth a penny each, as a way for its customers to save money; they get a slight discount when they buy them in bulk. But also, of course, buying a company’s virtual currency keeps customers tethered to that company’s platform. Think Microsoft and Xbox Live credits, or loyalty points from airlines. From Ars Technica: “Amazon isn’t doing this out of the goodness of its publicly traded heart.”

Also interesting: tax implications, amid a push for wider collection of online sales taxes. MIT Technology Review has pointed out that purchases using virtual currency are not taxed. Although Amazon has publicly changed its tune on collecting sales taxes in states where it doesn’t have a physical presence, Coins would bring up yet another tax issue.

• In other news of companies trying something new amid the rise or threat of others beating them to it, ABC will live-stream its own shows on its app for the iPhone and iPad, becoming the first major U.S. television network to do so. Although ABC shows are available for free to people using an antenna, the feature will be available only to cable and satellite subscribers. For now, it will be offered to customers in New York and Philadelphia. It will also roll out in other cities and on other mobile platforms in the coming months.

An interesting tidbit from the New York Times about this development: ABC had planned such an offering for next year, but decided to speed things up.

Could Aereo have been a factor? Online-streaming options are stacking up. As we’ve mentioned before, Aereo is a New York-based startup that uses antennas to pull in broadcast signals, then streams shows over the Internet. (It just announced a new pricing structure today: $8 or $12 a month.) The Barry Diller-backed company has faced legal action from broadcasters, which have threatened to become cable-only. As it expands, Aereo is seeking to stop future lawsuits by asking the U.S. District Court in New York to rule that its service does not violate broadcasters’ copyrights.

If other networks follow ABC’s lead, could it mean trouble for Aereo? It’s less expensive for ABC to stream the same content that Aereo does; GigaOm explains the technical details that boil down to Aereo having to use a unique feed for each customer.

 

Levi Sumagaysay Levi Sumagaysay (3959 Posts)

Levi Sumagaysay is editor of the combined SiliconBeat and Good Morning Silicon Valley. She also helps take care of SiliconValley.com, the Mercury News tech website. Email: lsumagaysay (at) bayareanewsgroup (dot-com).