Recently, Amazon announced that since Google Chromecast and Apple TV don’t “interact well with Prime Video,” soon, Amazon won't carry their devices, “in order to avoid customer confusion.”
Based on the positioning of the announcement, it might seem that Google and Apple declared war by not playing nice with Amazon. A closer look reveals that Amazon’s Prime Video content wasn’t built for these platforms in the first place, so Amazon isn’t reacting to attacks against it; it’s launching an attack against its biggest competitors.
This ban doesn’t just affect Amazon’s competition or even its Marketplace Sellers, whose remaining inventory will be removed from Amazon.com on Oct, 29. It also affects the trajectory of the TV/OTT industry and the viewers it caters to.
Here’s a quick lay of the land and some likely implications of Amazon’s imminent ban:
Streaming Players vs. Streaming Content
On the one side are the devices that allow viewers to access their shows and streaming content (think: Prime Video, Chromecast, Roku, XBOX, Playstation, Apple TV, etc.). On the other side are the content makers (think: HBO, Showtime, Netflix, etc.) And then there are the retailers who sell the devices (think: Best Buy). Amazon is all three of these things in one, so it can safely play bully by locking competitors out of its marketplace.
Amazon’s decision doesn’t result in a loss of subscription revenue from Google or Apple considering their devices didn’t run Amazon Prime Video anyway, but it will result in a loss in revenue from Apple TV and Chromecast device sales.
Perhaps most concerning, however, is that the company has officially set a precedent for other leading players in the space, who will likely begin limiting the content available on their devices in attempt to remain similarly competitive.
What These Walled Gardens Mean for the Consumer
The ideal situation for consumers is that they can buy any device they want and access any content from it. As more “walled gardens” go up, viewers will start seeing more and more content that’s limited to specific devices. Imagine, for instance, if HBO shows could only be viewed on one device, while Netflix shows could only be viewed on another. Customers will either have to buy multiple devices to watch all of their favorite shows…or go without some content in favor of other content.
When content is limited to a single player, the manufacturer can demand more for the player, whereas now the healthy competition among devices helps keep prices low (most players’ pricing remains stable at just under $100).
Where Have We Seen This Before?
Consumers, content creators and advertisers are all faced with a reality not unlike the Mad Men era when the big three TV networks controlled access and made the decisions for viewers.
More recently we’ve seen the backlash of walled gardens in the music world, where the division of content and devices means things like not being able to download Beetles music anywhere other than iTunes. Or not being able to get Taylor Swift on Spotify because Swift isn’t willing to give up control of her music (or revenue) on terms she doesn’t like.
Or even think about TV in recent history, like when AMC had to alert DirecTV’s 20.2 million subscribers that they’d be going dark mid-season of “The Walking Dead” because DirecTV wasn’t upholding the terms of their agreement, putting their own viewers at risk of not seeing the content promised to them.
The primary difference between these examples and the current situation is that the “portal” in this case (Amazon Fire) actually owns the content (Amazon Prime Video). This adds in an entirely new layer of conflict.
The industry has come too far—and viewers have become too savvy—to accept a media landscape where feuding media companies define what viewers watch and what they watch it on. To viewers, it doesn’t matter who owns the content or the device; they’re faced with a walled garden either way—and in most cases, one without a sign explaining why.