News

POV: Google v Amazon

Mindshare Point of View

Background:

Two of the world’s largest digital companies are going toe-to-toe in a spat that could be bad for the consumer and determine the future landscape of digital services and e-commerce.

Google has pulled official support for YouTube from Amazon’s Echo Show and Fire TV devices, meaning that owners can no longer access the video site through a YouTube app. According to Google, this is in response to a lack of cooperation from Amazon over giving consumers access to each other’s products and services.

Implications:

In a statement, Google said: ‘Amazon doesn’t carry Google products like Chromecast and Google Home, doesn’t make (its) Prime Video available for Google Cast users, and last month stopped selling some of (our sister company) Nest’s latest products. Given this lack of reciprocity, we are no longer supporting YouTube on Echo Show and Fire TV. We hope we can reach an agreement to resolve these issues soon.’

Amazon responded with its own statement: ‘Google is setting a disappointing precedent by selectively blocking customer access to an open website.’

This is the latest flare up of a long running argument between the major digital platforms as they vie to tie users into their platforms on an exclusive basis and do this through selling their own ecosystem devices.

Amazon removed Chromecast from its retail website in 2015, along with Apple’s TV player. Amazon explained the move by saying it wanted to avoid confusing customers who might expect its Prime Video service to be available on devices sold by Amazon. Earlier this year Amazon and Apple came to an agreement as it was announced Prime Video would come to Apple TV, but there is no deal with Google yet. In September, Google cut off YouTube from the Amazon Echo Show, which had displayed videos on its touchscreen without video recommendations, channel subscriptions and other features. Amazon later reintroduced YouTube to the device, but the voice commands it added violated the use terms and on Tuesday Google again removed the service.

Both Google and Amazon are vying for control of the home – through intelligent devices and smart assistants and speakers. Unfortunately, the only loser in this current round of the fight is the consumer, with YouTube disappearing from the Amazon based devices as of Jan 1 (although YouTube will still be available via the browser).

Summary:

Alphabet (Market Cap $720bn) and Amazon (Market Cap $560bn) are two of the most pervasive and powerful entertainment brands in the world. The public nature of this disagreement shows how much is at stake as they battle for consumer’s attention in the home, whether through the TV, thermostat or smart assistant. It is also a land-grab for shopping allegiance as they try and tie-in consumers to their ecosystem, especially as we move towards a voice search and shopping world. Both sides have huge war chest and huge ecosystems to leverage, so don’t expect this argument to be decided anytime soon.

Further Reading:

Guardian / Reuters / Wired