Will Apple and Google have to make Prime Video available on their platforms?
Amazon, the online mega-retailer, recently banned Apple TV and Google Chromecast from their marketplace.
According to an Amazon spokesman; "it's important that the streaming media players we sell interact well with Prime Video in order to avoid customer confusion." Yes, that's right. Amazon, the company that has 62 million listings for iPhone cases (and that is a real number) is banning Apple and Google's streaming devices because two extra options could overload consumers.
This isn't the first time that Amazon has made news for banning items. The issue came up last year following a dispute between Amazon and Hachette Book Group over e-book prices. Amazon temporarily banned all Hachette books until an agreement was reached, pulling authors like Nicholas Sparks and Donna Tartt, drawing the ire of (Hachette author) Stephen Colbert, who lampooned the company on his show. The issue, this time, is of a somewhat different structure. Amazon, which started out as an online bookstore, pushed Hachette and dropped their books, because it wanted lower prices. Now, Amazon is banning Apple and Google streaming devices because neither is compatible with Prime TV, and thus the reasoning is based not on prices, but on placing Amazon's own product in a better position.
As Bloomberg described, the move comes just before the massive holiday shopping season and shows "how Amazon is willing to sacrifice sales of popular brand name products -- Apple and Google have the best-selling media streaming devices generally -- to bolster its own video-streaming service." As is well known, and as Bloomberg also described, Amazon has invested heavily in its own original programming, like the award-winning, "Transparent," and shows like "Catastrophe" and "Hand of God."
How much could it cost Amazon? According to 1010data and a report from Found Remote, the decision could cost Amazon $100m in sales in the next year. The hardest hit will be Google, which sells 90 per cent of its Chromecast products through Amazon. Apple, as Bloomberg notes, "has its own stores and direct access to customers," so the effect on Apple will be less. But, in reality, the decision may not actually cost Amazon anything. Recently released earnings reports showed third quarter revenue of over $25bn, and the company's stock has shot up. And while there could potentially be a drop in Amazon's e-commerce revenue, the amount won't be enough to hurt the stock, and its cloud computing business, AWS, has been growing at a torrid pace with profits that nearly match all of Amazon's North American e-commerce business.
Consumers look to Amazon for shopping, often times more so than looking for specific brands. Amazon still has its popular Fire TV, the newest version of which has been well-reviewed, and the popular Roku device, among others. Additionally, Apple and especially Google, knowing how important Amazon is for their sales, may simply choose to become compatible with Prime TV.
The move is probably not going to be very popular with consumers and the public generally, but the decision may turn out to be a boon for the company and its television business. Just as any powerful retail chain, such as Walmart, can push companies to change or alter products or prices, Amazon can do the same. But Amazon is now worth more than Walmart, placing itself in a dominant position. Jeff Bezos, following the earnings report, is now the third richest person in the country. And it's a testament to Amazon's success that its decision to drop a couple items has upended an entire mini-industry.
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