While Google and Microsoft were making nice this week, ending their public patent feud, Amazon was working on plans to ban competing TV streaming services Apple TV and Chromecast from its online marketplace, reports Bloomberg Business. The reason: “to avoid customer confusion.” (cough, cough)
Amazon has been emailing its sellers to notify them that they must stop selling devices that don’t “interact well” with Prime Video, according to Bloomberg. Current inventory must be removed from Amazon-based stores by October 29. Prime Video is part of the Amazon Prime subscription service available to subscribers for $99 a year.
In addition to the video service, Prime members also get free shipping, online photo storage and other perks. In an August 2015 study released by Parks Associates, Amazon, Apple, Google and Roku make up 86% of the streaming media device market, making it difficult for new players to enter the market.
“Roku continues to lead streaming media device sales in the U.S. with 34% of units sold in 2014. Google is second with 23%, and new entrant Amazon overtook Apple for third place,” said Barbara Kraus, Director of Research, Parks Associates. “The market consolidation around these four brands forces new entrants to develop more creative features and functionality to tap into the strong consumer demand for streaming content. Devices with additional functionality such as the Intel Compute Stick may be a sign of things to come, where streaming is not the primary function but an extra feature to provide additional value.”
In its coverage of the news, Bloomberg’s Tom Giles, executive editor of technology, says that Amazon’s move smacks of anticompetitive behavior. In spite of that, Giles doesn’t think regulators will come after Amazon for antitrust violations, because there are other players in the market. Consumers have other choices.
Like the analysts quoted by Bloomberg, we think the excuse to avoid customer confusion is pretty thin. Instead, this move seems more like an attempt to eliminate the competition, at least in Amazon’s own backyard. Amazon isn’t content to be third, and as it continues to invest in exclusive programming for Prime video, it wants to protect that investment. What we want to know is how much this move will cost Amazon in terms of sellers, customers and sales.
Yesterday we reported that Amazon is offering Prime members free digital access to the Washington Post, also owned by Jeff Bezos, for six months. This is a positive move to help it retain Prime members and perhaps attract new ones. This latest move is the opposite; it is a very negative move, limiting consumers’ choices and raising the ire of Google and Apple. We hope the gamble is worth it for Amazon, but at first glance, this seems like a PR nightmare with antitrust implications. Not a good combination for Mr. Bezos.