Everyone is aflutter over Amazon
announcement that it will no longer sell media-streaming hardware that does not integrate well if Amazon Prime content service, a move that directly impacts Apple AAPL +1.82% TV and Google GOOGL +2.29% Chromecast. But let’s put the announcement in the context of history.
January 31, 2011: Apple announces that in-app sales are banned unless they go through Apple’s in-app purchase process, whereby the company takes 30% of the purchase price. Primary impact: Amazon can no longer sell eBooks through its Kindle app (unless, of course, it wants to give up 30%, which it obviously did not).
May 2, 2012: Target TGT +0.03% announces the company will no longer sell Amazon Kindles in their stores. The reason? Amazon’s hardware encourages purchases from Amazon, and after the company spent the last two holiday seasons taunting store-based retailers with their new mobile price-comparison app, designed specifically to encourage in-store showrooming, Target had had enough.
And, of course, today’s news, that Amazon plans to discontinue Apple TV
and Google Play hardware sales, presumably because the services do not make it easy to play Amazon Prime content. Clearly, Amazon is not the first to take a shot at competitors, and this move will not be the last.
But more important, this story isn’t about Apple or Amazon or anyone else. It’s about content and commerce. I spend a great deal of time on my blog here haranguing retailers for not paying attention to the links between content and commerce, particularly as they take those capabilities across digital touchpoints. But for some of these companies – particularly Amazon, Apple, Google, and Sony
too – the links between content and commerce go much deeper, to the point where they are becoming inseparable.
Amazon’s move is neither bold nor brash. It is just another shot fired in the escalating war to own the shopper’s heart and mind (and wallet). These tech/media/consumer product companies have merely been the first to discover that good content goes a long way to tipping the scales in your favor, so long as you are the one who also owns the distribution.
For the consumer, it’s still the same old problem. I don’t want to have to pay Netflix, the Playstation Network, Amazon, Apple, and Hulu on top of a cable TV subscription just to consume the content I want. But it’s not in these companies’ interests to make it easy to get content anywhere, thus commoditizing it. That drastically reduces the value of their own exclusive distribution.