Amazon Isn't About to Go to War With Apple Over Video, Right?
“Acceptable business terms” is what Amazon CEO Jeff Bezos is demanding from Apple before his company’s Instant Video service comes to Apple TV. We don’t yet know what Amazon is demanding or what Apple has already put on the table. What we do know is that consumers are the ones stuck in the middle over this mess.
The (likely) issue
Amazon Instant Video is already available on multiple third-party devices, including Xbox, Roku, and PlayStation. The service also comes preinstalled on smart televisions from Samsung, Sony, and VIZIO, among others.
The service is also available on iOS devices with one important caveat. Amazon Prime subscribers can access Prime content through the iOS app. Paid content, however, is only available once you’ve made the purchase at Amazon.com. In other words, Apple doesn’t get its traditional 30 percent cut of those purchases. The same limitation exists for the Amazon Kindle app for iOS.
Bezos didn’t specifically mention Apple’s customary 30 percent take of all App Store purchases as a factor in negotiations. Instead, noting that “private business decisions should stay private.”
So what’s going on? Here are some thoughts.
Most likely, Amazon wants consumers to have the ability to rent or purchase video content directly from the Instant Video app on Apple TV. Ideally, Amazon doesn’t want to pay Apple its 30 percent but probably would do so.
For its part, Apple seems to be balking at allowing any third-party tvOS app from offering film rentals or purchases. Case in point: Walmart’s Vudu is also missing on Apple TV. Instead, Cupertino appears committed to only allowing a buying feature on iTunes.
So why can’t it be like iOS? Most likely Bezos and company are the ones playing hardball and with good reason. The sticking point probably has little to do with the 30 percent. Instead, Apple is likely saying no to any app that would offer film rentals and purchases. Because of this stance, Amazon has refused even to allow its Prime offerings on the entertainment box. For added measure, the company is also refusing to sell Apple TVs through its online retail site.
The bottom line
No easy resolution. Apple should allow Amazon to sell video content on the Apple TV, even if this means competition for iTunes. For its part, Amazon should accept the 30 percent or negotiate a lower percentage. They should also once again sell Apple TV devices online.
Unfortunately, this standoff might not end anytime soon because both companies are trying to gain a bigger piece of the entertainment pie. Amazon wants its original programs to fuel Prime membership growth. Apple, on the other hand, wants to create its own video streaming service, which might compete with Amazon in the long-term.
Few people know how or when this battle will end.
