Why Amazon is banning sales of Apple and Google streaming media boxes
The battle over the growing market for streaming media players appears to be heating up. On Thursday, Amazon announced that it would block the sale of streaming media devices made by Apple and Google on its online marketplace in favor of its own device, Amazon Fire TV, beginning Oct. 29.
In an e-mail, the company told sellers in its widely-used marketplace that it would stop allowing new listings and remove existing posts for the Apple TV and Google Chromecast, ostensibly because the rival devices don鈥檛 鈥渋nteract well鈥� with Amazon鈥檚 Prime video streaming service, Bloomberg .
Some analysts dismissed the company鈥檚 cryptic technical argument, saying that banning devices by the rival companies, which both recently unveiled highly-publicized new versions of their devices, amounts to a deliberate strategy by the company to expand into developing goods and services, not just selling them.
鈥淣o one's buying Amazon's excuse,鈥� Dan Rayburn, an analyst at market research firm Frost & Sullivan who follows streaming media,. 鈥淣either Google nor Apple is preventing Amazon from getting its app on their devices," he told the paper. 鈥淎mazon has made a strategic decision to not carry their devices because they want to push their platform.鈥�
Last year, Amazon鈥檚 Fire TV, which can use a wired connection, and the Fire TV Stick, which is wireless, became the third-highest selling set-top video streaming boxes, behind offerings by Roku and Google, by the market research firm Parks Associates found in August.
The Apple TV set-top box dipped to fourth place, but analysts say Amazon鈥檚 ban may not have that much of an impact because the Cupertino-based company has its own stores, unlike rival Google.
The company said they had issued the ban to avoid 鈥渃ustomer confusion.鈥� Amazon will continue selling media players by Roku, which focuses exclusively on streaming media, as well as gaming consoles that can play streaming media by Microsoft and Sony. 鈥淩oku, Xbox, PlayStation and Fire TV are excellent choices,鈥� the company said in its e-mail, the New York Times .
Amazon has employed a similar strategy before in dealing with rival products, though with a more limited impact, the Times notes.
Last year, following with the book publisher Hachette over the company鈥檚 contract with Amazon, the Seattle-based marketplace said it would make it harder for customers to buy Hachette books, but added that they would still be sold by third-party sellers.
Amazon鈥檚 strategy to block its two key rivals likely does not amount to an antitrust violation because customers can still buy the products elsewhere, one legal expert told Bloomberg. But analyst Michael Pachter, from Wedbush Securities in Los Angeles, said the company鈥檚 argument that compatibility issues were at the root of the ban was 鈥渆specially weak.鈥�
Ceasing to sell specific products by such high-profile rivals could have negative consequences for sales of Amazon products, other analysts warned.
鈥淭his has the potential to hurt Amazon as much as it does Apple and Google,鈥� Barbara Kraus, an analyst at Parks Associates, told Bloomberg. 鈥淎s a retailer, I want to give people a reason to come to me. When I take out best-selling brands, I take away those reasons.鈥�
