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Tough Road To Cooperation For Tech Rivals Exhibited By Amazon-Apple TV Deal


06/06/2017


Tough Road To Cooperation For Tech Rivals Exhibited By Amazon-Apple TV Deal
The manner in which competitive tensions among Silicon Valley titans can stand in the way of serving customers was showed by a deal that brings Amazon Prime Video to Apple TV which was announced on Monday at Apple Inc's developer conference after years of talk between the two companies.
 
Linking Amazon.com Inc's booming video-streaming service with Apple TV, a device for watching television over the internet, had a very simple logic that was also very obvious.
 
In order to sell its TV player, Apple needs great video. And in order that people sign up for its Prime club to watch them - and buy more toilet paper, too, Amazon needs places to stream its TV shows. On whatever device that the viewers choose to use, they would want to watch their favorite programs on them.
 
And yet, the result of a negotiation stretching back at least to 2015 when Amazon stopped selling Apple TVs on its retail site was Monday's announcement, instead of just being routine one according to the logic mentioned above.
 
Amazon wanted to avoid confusing customers who would expect Prime Video to be on devices sold by Amazon, the company has said as it attempted to explain that move. Instead getting a prod for people to buy Amazon's competing Fire TV players and a negotiating tactic to get Prime Video onto the Apple device, were the reasons as seen by critics.
 
"Whenever these companies try to freeze each other out, the consumer always loses," said Paul Verna, an analyst at research firm eMarketer.
 
On the issue of how their differences have affected customers, Amazon and Apple declined to comment. While not mentioning a specific date, both the companies said Amazon shows will be available on Apple TV later this year.
 
A spat between Apple and Amazon limited customer choice is also not limited to streaming only. Songs from an Amazon music account or even Spotify, but not from Apple Music can be told to be played by Amazon's popular voice-controlled speaker, the Echo.
 
Books are only allowed to be read on Amazon's Kindle app when they are used on Apple's iPhone. Such books can only be by people directly from Amazon's website.
 
The company at times brings in tangential business concerns as leverage in negotiations, according to former Amazon employees.
 
"The outcomes of these deals may factor into future conversations," said Scott Jacobson, a former Amazon manager and now managing director of Madrona Venture Group.
 
How Amazon and Apple came to terms on the video player is however not clear.
 
A better starting point for negotiations was available for Amazon by the ascendance of Prime Video, analysts estimate. Including three Oscars in 2017, its shows and films have started winning awards. Roku, not only offers Prime Video but has a smaller price tag than Apple TV and is the internet video player with most market share.
 
"It put Apple TV at a big disadvantage," said Alan Wolk, lead analyst for TV industry publication TV[R]EV.
 
Amazon declined to comment on whether it will again sell Apple TVs.
 
(Source:www.reuters.com)