Amazon’s decision to stop selling streaming devices that don’t support Amazon Prime Video has ruffled quite a few feathers. Many see this decision as a way for Amazon to hurt the sales of competing devices, but there is a lot more to it than that. The real issue, and likely the driving force behind this decision by Amazon, is with in-app purchase restrictions imposed by Apple and Google, as well as the closed nature of the Google Cast protocol.
Amazon has decided to stop selling media streaming devices which do not support Prime Video. They have explicitly named the Apple TV, the Chromecast, and the Nexus Player as the devices being removed from Amazon.com. Roku, Xbox, and PlayStation devices were explicitly listed as being unaffected because they “interact well with Prime Video.”
Many are quick to point out that it’s Amazon themselves who have decided to not bring Prime Video support to the banned devices and that it’s fully in Amazon’s control which devices fall under the ban reasoning. While, on the surface, it’s true that Amazon can technically add Prime Video support to the banned devices at any point, there are actually underlying restrictions put in place by Apple and Google, which prevent a full featured implementation of Amazon Instant Video on the banned devices from being a financially sound option for Amazon.
The issue lies primarily with Apple and Google’s rules for in-app purchases. Both companies require that all digital content purchased within apps in their app stores must use the respective company’s in-app purchase mechanism. This ensures that both Apple and Google receive a 30% cut of all digital content sales within apps in their app stores. An app developer cannot offer an alternate form of payment, be it PayPal or one’s Amazon account, for digital content.
“Apps that link to external mechanisms for purchases or subscriptions to be used in the App, such as a ‘buy’ button that goes to a web site to purchase a digital book, will be rejected” ~Apple App Guidelines
“Developers offering products within another category of app downloaded from Google Play must use Google Play In-app Billing as the method of payment” ~Google App Guidelines
This means that, if Amazon were to release an Amazon Instant Video app for the Apple TV or Nexus Player, they would be forced to forfeit 30% of all movie sales, movie rentals, TV show sales, TV show rentals, and Prime membership sign ups initiated through those apps. We don’t know enough about the specifics of Amazon’s profit margin on digital video sales to know for sure, but it’s probably accurate to assume that losing 30% of all sales would make Amazon Instant Video apps on these devices financially unviable for Amazon.
Roku, Xbox, and Playstation do not impose the same 30% cut and restrictions for digital sales within apps, which is why those devices have Prime Video apps and are excluded from the ban. Remaining is the Chromecast, which actually has additional restrictions around it that makes it a poor choice for Amazon to support.
Amazon Instant Video apps exist for both iOS and Android mobile devices, but each come with their own quirks due to the previously mentioned in-app purchase limitations imposed by Apple and Google. The iOS app can only play Prime video content and content you’ve purchased or rented through Amazon’s website. This way, Amazon never initiates a sale through the iOS app. The Amazon Instant Video app for Android, on the other hand, circumvents Google’s in-app purchase restrictions by only being available through the Amazon Appstore for Android. Only Android apps within the Google Play store are subject to Google’s in-app purchase restrictions on digital content.
So, you may ask, why doesn’t Amazon include Google Cast support for Chromecast in their iOS and Android apps? The reason is likely due to Google Cast restrictions imposed by Google. In order for Google Cast to function on Android, the device must have Google Play Services, which is a proprietary background service and API package. In order for device manufacturers to include Google Play Services, they must license the package from Google, which results in contractual limitations being placed on the device. These licenses are the primary way Google maintains an iron grip on Android, despite it being open source.
The restrictions Google enforces around Google Cast and Google Play Services means Amazon can never make their own Fire Phone, Fire TV, and line of Fire tablets compatible with Google Cast or the Chromecast. Sure, Amazon can technically make their limited iOS and Android apps compatible with the Chromecast, but it would cause confusion and disdain with customers of Amazon’s own hardware devices who will not understand why the feature was omitted from their device. So, instead of supporting Chromecast in a limited fashion, it may be that Amazon has decided to hold off on Google Cast capabilities until they are permitted to implement them across all of their apps and devices.
Regardless of what you think about Amazon’s decision to stop selling Apple and Google streaming devices, it’s obvious there’s more going on than just one company deciding not to sell a competitor’s product. Amazon seems to be protesting the restrictions of Apple and Google’s app terms by leveraging their retail presence and implementing their own restrictions. What’s clear is that, as a result of all the various restrictions in place by Amazon, Apple, and Google, we the consumers come out the biggest losers.