Would you be surprised if Amazon launched an online pay-TV service? No, neither would we, especially when it continues to offer a growing amount of original content, such as Alpha House, Betas, and children’s programs like Annebots, Tumbleaf, and Creative Galaxy.

On Tuesday, The Wall Street Journal reported that Amazon is holding talks with big entertainment companies to license their TV channels for a possible online pay-TV service. What this means is that Amazon Prime subscribers would be able to watch live TV channels, like those offered by cable or satellite TV companies, aside from the on-demand content it’s currently offering.

The report claims that Amazon hopes to entice consumers who’ve become frustrated with their traditional pay-TV connections’ rising bills or outdated connection. What Amazon is working on will be a great alternative for these frustrated consumers.

People familiar with the matter claim that Amazon has approached three media companies seeking rights to distribute their channels online, but negotiations are still in their early stages and there’s no telling if they’ll will move forward.

Initially, Amazon kept mum about the report but eventually issued a statement.

“We continue to build selection for Prime Instant Video and create original shows at Amazon Studios, but we are not planning to license television channels or offer a pay-TV service,” Amazon said.

If Amazon does succeed in offering live TV online, this could mean big trouble for cable companies, but there’s a huge chance this won’t go any further forward as media companies are not known for stirring up trouble with service providers offering their content.

If by some miracle this does goes forward, Amazon Prime subscriptions could sky rocket – if it’s tempted to cash in. Then again, the price could stay at the current $79 a year, since Amazon is pretty comfortable with just breaking even. The company would probably do better to use its live content to its advantage, as ads can simply be placed on the screen, much like wth traditional TV, and if you don’t want any of the ads, subscribers can just pay a little more to get rid of them.

Amazon CEO Jeff Bezos proudly announced back in December that Amazon Prime has tens of millions of subscribers, aside from logging more than 36.8 million items ordered on Cyber Monday.

This isn’t the first time we’ve hear rumors of Amazon entering the TV scene. In April of last year, it was reported that Amazon was planning on launching its own set-top box before last Christmas.  Obviously that didn’t happen, but this rumor still has plenty more legs in it.