Amazon bans the sales of the Apple TV and Google Chromecast.


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Amazon has decided to ban the sales of the Google Chromecast and the Apple TV from its website. The online retailer sent all of its marketplace sellers an email saying it would stop with the offering of the video-steaming products. They announced that no new listings will be allowed and that all inventory will be removed the 29th of October.

Amazon claims the ban has to do with the compatibleness of these devices with the Prime Video service, Amazon’s version of Netflix. This service isn’t easy accessible through the devices of Google and Apple. The decision to ban these products underscores Amazon’s dedication to put more effort in its home-grown hardware, such as the video streaming service. Over the last three years Prime Video has become more and more important to Amazon, and they find it important to sell steaming-media players that interact with this service they offer. They believe it can cause customer confusion to sell devices that do not support their service.

However, there is also being said Amazon bans these products because these two companies are the company’s biggest competitors when it comes to steaming TV. Some people are saying it is up to Amazon itself, to make their service compatible with the devices of Apple and Google. This will simply be possible by creating an app for the devices. The incentive for Amazon to do so, seems quite obvious. Amazon spent an enormous amount of money building op there service Prime Video, and is probably concerned that these competitors could threaten the rise of this new media.

The ban is announced just before the start of the holiday season, the period when retailer make the most money. Banning the steaming devices of Google and Apple means they will ban two of the most popular products form their webstore. Which will probably result in a loss in sales not only for Apple and Google, but for Amazon as well.  Although Amazon claims they have other excellent choices present in their shop, which will allow you to stream content on your TV, we still expect a significant loss in sales in this division. Experts believe this will also have a bad influence on Amazon’s long term results. Amazon is known as a store where everything is available, this will no longer be the case. Furthermore, it can occur that Amazon itself isn’t able to offer the specific service customers want and they cannot profit from the sales of its competitors anymore.

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Author: Jessica Dooper (358278)

References:
http://www.cnet.com/news/amazon-to-stop-selling-google-chromecast-apple-tv/ [04/10/2015]
http://www.bloomberg.com/news/articles/2015-10-01/amazon-will-ban-sale-of-apple-google-video-streaming-devices %5B04/10/2015%5D
http://fortune.com/2015/10/02/amazon-chromecast-apple/ %5B04/10/2015%5D
http://www.theverge.com/2015/10/2/9439281/amazon-ban-apple-tv-chromecast-why %5B04/10/2015%5D

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One response to “Amazon bans the sales of the Apple TV and Google Chromecast.”

  1. laduc01 says :

    First of all I would like to complement you on providing us with a brief summary of what Amazon does in the competitive environment of the media/television industry. I agree that this decision from Amazon will be impactful and very unique regarding their timing (just before the Christmas period). Therefore I am very curious which response will come from Apple and Google.

    From a strategy perspective I can understand why Amazon is making this decision. They are trying to capture the most value from their vertical integration with their media hardware product and their media service. In this way they are trying to differentiate from the competition to capture value from their customers. The analogy can be made with what they have done with the Kindle and their books library, which was very successful. However the future will tell if something similar can be accomplished via their prime video and maybe a hardware product they might launch in the future (to complete this vertical integration).

    From a consumer perspective I believe this is a very sad decision from Amazon, since collaboration (even between competitors) drives innovation even further (Möller & Rajala, 2007) (Gnyawali & Park, 2011). Therefore this decision from Amazon will slow down the innovation that from my point of view should happen more rapidly in the media industry. I am already wondering why I am wasting money on the conservative television services, where I need to wait till a certain time to watch my desired content (Yarow, 2015). Therefore I would like to advice Amazon to rethink this decision, since co-opetition (the collaboration between competitors) is possible and beneficial if businesses are still able to differentiate with their value adding activities (Ketchen Jr. et al., 2004).

    Vincent Laduc (417658vl)

    References:
    Möller, K. & Rajala, A., 2007. Rise of strategic nets — New modes of value creation. Industrial Marketing Management, 36(7), pp.895-908.

    Gnyawali, D.R. & Park, B.-J.(., 2011. Co-opetition between giants: Collaboration with competitors for technological innovation. Research Policy, 40(1), pp.650-63.

    Ketchen Jr., D.J., Snow, C.C. & Hoover, V.L., 2004. Research on Competitive Dynamics: Recent Accomplishments and Future Challenges. Journal of Management, 30(6), pp.779-804.

    Yarow, J., 2015. The new Apple TV will blow up the TV industry. [Online] Available at: http://uk.businessinsider.com/the-new-apple-tv-is-going-to-blow-up-the-tv-industry-2015-9?r=US&IR=T [Accessed 1 October 2015].

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