Amazon to Halt Sales of Apple TV, Chromecast Devices

But Not Platforms that ‘Interact Well’ with Amazon Prime Video (Updated)
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As an indicator of how competitive the market for OTT video services and devices is becoming, Amazon will stop selling the Apple TV and Google Chromecast adapter on October 29 to instead focus on platforms that “interact well” with Amazon’s own streaming service, Bloomberg first reported.

"Over the last three years, Prime Video has become an important part of Prime," Amazon said told marketplace sellers in an email, per the report. "It’s important that the streaming media players we sell interact well with Prime Video in order to avoid customer confusion."

While Amazon gives Apple TV and Chromecast the heave-ho, it will continue to sell streaming players from Roku, Xbox consoles, and PlayStation consoles, Bloomberg said. Amazon’s own Fire TV box and Fire TV stick, of course, are optimized for Amazon Instant Video and Amazon Prime Instant Video.

Google didn’t comment on the Amazon decision. Amazon and Apple have been asked for comment.

Update: An Amazon spokesperson issued this statement: "Over the last three years, Prime Video has become an important part of Prime. It’s important that the streaming media players we sell interact well with Prime Video in order to avoid customer confusion. Roku, XBOX, PlayStation and Fire TV are excellent choices."

Still, Amazon’s decision comes at a curious time as it arrives amid the introduction of a new Apple TV device that, Apple claims, will provide a more open application ecosystem than its current product does. It also comes on the heels of the debut of a new, redesigned Chromecast that features improved WiFi connectivity and faster video streaming playback. 

The loss of Amazon could hamper sales of both products.

When Google launched the original Chromecast in July 2013, Amazon quickly ran out of stock, and demand for the product was so high that Google had to nix a promotion that offered three months of Netflix with each Chromecast purchase. Google has sold more than 20 million Chromecast devices worldwide.

Google launched the Google Cast SDK in February 2014 that enables developers, a group that would presumably include Amazon, to optimize their apps for Chromecast, which now supports “thousands” of apps, including Netflix, Hulu, HBO Go, HBO Now, Watch ABC, Starz Play, Fox Now, Epix, and Showtime.  

Not on that list is Amazon Prime Instant Video. Per Chromecast Help, a troubleshooting site that's not directly affiliated with Google, consumers have to jump through a few hoops to get Amazon’s service to run on the Chromecast – they must use a Google Chrome web browser outfitted with the Google Cast extension. And to get a smooth as possible experience, Chromecast Help suggests that users through Amazon Prime using Adobe Flash rather than the default Microsoft Silverlight setting. 

Here’s a video of the walk-through:

One analyst isn’t buying Amazon’s excuse.

“I think that the excuse of avoiding customer confusion is a not-so-veiled attempt to favor Amazon first-party products over third-party products, and think it was a bad move,” Michael Pachter, an analyst at Wedbush Securities, told Bloomberg, noting that fewer than 20% of Amazon customers are Prime members.

According to Parks Associates, Roku led the way with 34% of OTT streaming units sold in 2014, followed by the Google Chromecast (23%), Amazon Fire TV, and Apple TV.

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