Amazon’s abrupt decision to stop selling Apple TV and Chromecast devices has led to a lot of head-scratching, with analysts and pundits alike wondering why the retailer would forego the revenues from two of the market’s best-selling consumer electronics devices. Amazon would like consumers to believe it’s all about Prime Video not being available on either. Critics muse that it’s a thinly veiled move to sell more Fire TVs.
The truth is likely a lot more complex, and part of a new platform war that pits Amazon against Apple and Google. It will likely take some time for the real backstory behind Amazon’s move to emerge. In the meantime, it’s worth looking at some possible reasons:
Consumer confusion. Amazon argued that consumers are confused about Chromecast and Apple TV not offering access to Amazon Video. That’s actually true: Amazon’s own support forums feature hundreds of posts from consumers wondering why they can’t access Prime Video on Chromecast.
However, at least on the surface, there’s an easy fix for this problem: Amazon could just add Chromecast support to its Amazon Video Android app, like thousands of other developers have done with the help of Google’s Cast integration tools. Likewise, the company could easily build its own Apple TV app, especially now that Apple has brought an app store to its streaming device.
The fact that Amazon hasn’t done either is a business decision, not a technical issue. And Amazon removing Apple TV and Chromecast from its store just means that the company could not agree on business terms with Google and Apple. Terms like…
The app store tax. Apple has been charging developers 30 percent for any in-app purchase or subscription payment, which has long been a point of contention. Amazon would likely want Apple to forego or at least lower these fees before it agrees to bring its app to Apple TV. It’s possible that both companies couldn’t agree on mutually acceptable terms, which is why Apple TV is launching without Prime Video. And it’s also very much possible that Amazon is now flexing its muscles to get Apple to give in.
The same can’t be the case for Google, which doesn’t charge media services the same fees. However, Google and Amazon have plenty of other issues they disagree on, including…
Amazon’s App Store. Speaking of consumer confusion: It’s a little-known fact that Amazon isn’t actually distributing Amazon Video Android app for mobile phones and tablets on Google Play. Instead, it is asking consumers to first come to its website, download the Amazon app, and then download the Amazon Video player.
This is telling about the role online video is playing for Amazon: The company doesn’t charge consumers directly for Prime Video, and instead just uses it as a reason to sell more Prime subscriptions. Amazon does make some money with VOD, but it’s likely negligible when compared to other revenue streams. And as such, the Amazon Video app for Android currently functions as a trojan horse for Amazon’s own app store, which directly competes with Google Play.
Amazon previously tried to add its app store to applications it distributes via Google Play, but Google’s terms of service don’t allow this. It’s possible that Amazon is trying to get concessions from Google on this front, but unlikely that Google would give in.
Google’s grip on Android. Amazon and Google have been having a somewhat adversarial relationship for some time, thanks in large parts to Amazon’s decision to use Google’s Android operating system for its own Fire tablets and its Fire TV devices, without including any of Google’s apps.
One area where this conflict has been playing out is actually Chromecast: When Google launched its streaming stick two years ago, consumers could briefly use it in conjunction with Amazon’s Fire tablets as well. However, Google has since closely tied Chromecast to its official version of Android, in turn breaking Chromecast support for Amazon’s mobile devices.
Amazon may try to get Google to bring Chromecast support to Fire tablets, but it’s unlikely that this issue would be resolved without a bigger peace accord between Amazon and Google.
Other commercial agreements. These are just some of the likely reasons for Amazon’s decision to very publicly duke it out with Google and Apple. The consumer electronics world is notorious for backroom deals. Brick-and-mortar retailers only giving streaming devices shelf space if they also carry the retailer’s apps, and consumer electronics manufacturers regularly feature apps not based on popularity but on big checks.
It’s very likely that Amazon had plenty of discussions with both Apple and Google, and it may not be all that clear who is the bad guy in this charade. Except of course for consumers, who can only see Amazon’s decision as aggressive posturing, and may just take their money elsewhere — until the companies involved strike their backroom deals and publicly resolve their differences.