• by Karlene Lukovitz  @KLmarketdaily, December 17, 2019

Things are getting complicated, and a bit in-your-face, as the battle between Amazon and Roku for CTV viewers and advertisers accelerates.

In a major development, Amazon is removing demand-side platform Dataxu from its Fire TV third-party DSP service, according to AdExchanger.

The ejection, after a partnership lasting less than five months, is the result of Roku’s late October acquisition of Dataxu, for $150 million in cash and stock. And it is not in the least surprising.

After all, the Dataxu acquisition is intended to help Roku better compete as a full-service platform with other major OTT platforms, including Amazon Fire TV, which has its own DSP.

(Amazon did not respond to AdExchanger, and Dataxu and Roku declined to comment.)

It was just five months ago that Amazon opened up Fire TV for private marketplace programmatic deal negotiations between advertisers and publishers through Dataxu and The Trade Desk.

Although Roku has also been forming partnerships (including a first-party data programmatic buying agreement with Adobe announced back in March), Amazon’s move was heralded as potentially game-changing boost for connected TV and programmatic video.

In addition to its ad volume, advertisers and platforms were hoping that Amazon’s outsized influence might push other major tech companies and television networks to open more doors to their own walled gardens, enabling easier and more transparent media planning and buying.

During The Trade Desk’s third-quarter earnings call last month, CEO Jeff Green reported that impressions from Fire TV were 21 times higher than in the year-ago quarter, contributing to more TDD customers accessing a growing range of available premium inventory. All of this drove a 145% increase in ad spending on the platform versus the third quarter of 2018 (although that growth rate was actually down a bit from the second quarter's 150% gain).

And now that TDD and Amazon’s own DSP are the only programmatic buying platforms able to access Fire TV inventory, analysts are noting that TDD’s revenue growth should benefit going forward.

Roku has said that it plans to keep its own inventory marketplace open to third-party DSPs and maintain Dataxu’s open advertising ID-based system. But Amazon is so far mum on whether it will now give DSPs other than TDD access to Fire TV inventory.

YouTube aside, Roku and Fire TV control the greatest amounts of programmatic video inventory, and each controlsabout 30% of their video advertising impressions across their publishers' app platforms.

All of this may be great for TDD, and perhaps for Roku’s long-term strategy (although the Fire TV/Dataxu news, plus news that its CFO Steve Louden was leaving, caused its stock to drop on Monday). But it's likely not ideal for stoking the momentum of CTV’s overall ad-buying scenario.

Meanwhile, in another competitive development, it has just been announced that Apple TV is now available on Amazon Fire TV Edition smart TVs in the U.S.

That means that owners of those TVs can now open the Apple TV app through an Alexa voice command, stream content from the new Apple TV+ app, and access their iTunes.

Prior to this, in late October, Amazon introduced the Apple TV app on some Fire TV Sticks and Fire TV Basic Edition sets in more than 50 countries.

That closely followed the mid-October launch of Apple TV on Roku devices in the U.S. and 15 other countries.

According to nScreen Media, Roku and Fire TV devices have 39% and 30% shares of the streaming device market, respectively, but Amazon is showing faster growth.

Roku is in about half of U.S. streaming box households, but it has only a 30% share of streaming sticks, while Fire TV has a less than 30% share of boxes and close to 60% share of sticks, according to TDG connected consumer research released this year.

Roku, which has about $100 million in billings, has said that it is now the largest shipper of connected TVs in the U.S.

There is a growing prize to fight over, according to eMarketer, which estimates that OTT ad spending -- while still representing only about 1% of overall advertising -- will increase by 38%, to nearly $7 billion this year, and claim more than 200 million viewers by 2020.