Why Amazon is banning sales of Apple and Google streaming media boxes

The online marketplace told sellers in an e-mail Thursday that it would remove listings for the rival products beginning October 29, ostensibly because the products did not "interact well" with its own Prime Video service.

Beck Diefenbach/Reuters
An Amazon Fire TV is displayed during a media event introducing new Amazon products in San Francisco on Sept. 16. The company is banning sales of streaming media players made by Apple and Google on its online marketplace beginning Oct. 29, in what analysts call an effort to increase sales of its own streaming products.

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’t “interact well” with Amazon’s Prime video streaming service, Bloomberg reports.

Some analysts dismissed the company’s 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.

“No one's buying Amazon's excuse,” Dan Rayburn, an analyst at market research firm Frost & Sullivan who follows streaming media, told the San Jose Mercury News. “Neither Google nor Apple is preventing Amazon from getting its app on their devices," he told the paper. “Amazon has made a strategic decision to not carry their devices because they want to push their platform.”

Last year, Amazon’s 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, a report by the market research firm Parks Associates found in August.

The Apple TV set-top box dipped to fourth place, but analysts say Amazon’s 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 “customer confusion.” 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. “Roku, Xbox, PlayStation and Fire TV are excellent choices,” the company said in its e-mail, the New York Times reports.

Amazon has employed a similar strategy before in dealing with rival products, though with a more limited impact, the Times notes.

Last year, following a dispute with the book publisher Hachette over the company’s 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’s 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’s argument that compatibility issues were at the root of the ban was “especially weak.”

Ceasing to sell specific products by such high-profile rivals could have negative consequences for sales of Amazon products, other analysts warned.

“This has the potential to hurt Amazon as much as it does Apple and Google,” Barbara Kraus, an analyst at Parks Associates, told Bloomberg. “As 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.”

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