How Digital Frenemies Amazon Fire TV, Roku Can Help Each Other

Big media companies that own TV networks and TV production companies occasionally sell TV shows to competitors.

“Modern Family” aired for 11 seasons on ABC. But it was produced by 20th Century Fox. Reruns were sold in syndication to USA Networks (a NBCU network), as well as Fox TV stations. “The Blacklist” on NBC, still airing, is produced by Sony Pictures Television.

But when it's an initial original airing of a TV series, placing a show on a competitor airwaves is still a rare occurrence. Virtually all TV prime-time networks shows typically come from TV networks' own sister TV production units.

So how does the modern digital video world adjusts to this? Somewhat in the same way. The growing Roku Channel, which runs on the Roku set-top box/smart TV platform, has made a deal with arch competitor Amazon Fire TV to run on its set-top box/platform.

The concept of frenemy in the media world is nothing new.

Companies get something even when they compete with each other. The Roku Channel gets to expand beyond its 43 million households the Roku platform provides to around another 43 million or so homes from Amazon Fire TV. And it gets to promote that, as well as selling more advertising revenue.



And what does Amazon Fire TV get? Kind of the same time, including a no-subscription fee service and an ad-revenue share as well.

For all apps, both Amazon and Roku take a share of revenue -- advertising and/or subscription fee -- when and where that is applicable.

Roku typically takes a 30% share of advertising impressions (which translates into revenues) from a content owner's app for carriage on the Roku platform. In addition, Roku takes a standard 20% share of an app’s subscriber fees -- if one is charged to users.

Media executives say lower shares for both can be secured with big legacy media companies when other deal points are included.

As for Amazon Fire TV? Similar revenue shares, according to sources. With that come some growth potential. Rising viewership of those apps means more money in the pockets of both platforms.

Surely some restrictions can apply. One can wonder why Amazon’s IMdb TV, for example -- a free, ad-supported app, just like the Roku Channel -- shouldn’t get the same treatment from Roku in return if Roku were to carry it?
(One can get some IMDb content-- free TV and movies -- through Prime Video app on Roku.)

Speculation is IMDb TV is closely tied into advertising exposure on Amazon’s ecommerce platform. But so what? Why not get the extension of those homes -- where at least Amazon can sell more impressions?

Perhaps the definition of frenemies in the digital video world is still evolving.

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