1. More GAFA Game Of Thrones
While Disney buying Fox rumors continue to swirl, and bad “fox in the mouse house” puns fill the air, the GAFA crew has been busy playing its own version of Game of Thrones.
GAFA— Google, Amazon, Facebook and Amazon are the big four internet players who are busy disrupting or trying to disrupt the media industry. (You may hear some people refer to “FAANG.” You may ignore those people. While Netflix is a successful company, it is at nowhere near the scale of those other four—think of it as one of those random city-states Daenerys passes on her way back to Westeros.)
So just this week, House Apple allowed House Amazon’s TV app to appear on the unfortunately overpriced Apple TV. To complete the circle however, House Google withdrew its YouTube apps from House Amazon’s Fire TV and Echo devices.
Why It Matters
All this infighting just makes the GAFA companies seem petty. It’s like when Dish decides to black out CBS for a few weeks during football season to make a point about retrans fees. Consumers don’t really care who is right or who is wrong. They just care that they can’t watch football, and they’re mostly annoyed with Dish because they’re the ones who decided to block CBS.
So too with GAFA.
While there are many reasons why Apple TV lags so far behind Roku et al—a ridiculously inflated price point being the primary one—the fact that they didn’t have Amazon Prime available until this week certainly didn’t help.
Apple was annoyed that Amazon didn’t sell Apple products and no doubt got that Amazon’s movie rental business was a threat to iTunes. (A correct assumption according to the Wall Street Journal, which reported this summer that Apple’s share of the online video rental market dropped by a whopping 20% to 35%. Or as the first sentence of the Journal article aptly put it, “Apple Inc.’s iTunes Store—already struggling against rising competition for music listeners—is losing the battle for video viewers as well.”)
Adding Amazon to the Siri/Apple TV universe isn’t going to suddenly propel Apple TV back into a game that Roku, and to a lesser extent Amazon are dominating (a product at a reasonable price point would be the only way to accomplish that), it takes away a reason someone who is intent on
spending $100 more than they need to buying an Apple TV might have for passing it up.
So too Google and Amazon Fire TV. Having finally managed to get audiences to start taking the idea of watching YouTube on big screen TVs seriously, Google is acting like a spoiled child and taking its toys home, allegedly because Amazon allowed an unauthorized version of the YouTube app to appear last time they had a tiff. While this may not sit well with Google, the unauthorized app probably helped them far more than it hurt them, by keeping YouTube viewers watching YouTube rather than switching over to something else in its absence.
Similarly, no good will come out of their most recent hissy fit, as its far more likely Fire TV viewers will just watch more Hulu rather than switch to a device that has YouTube this month, and so Google is the one who gets hurt—no one is getting a streaming device to watch YouTube on their TV set.
What You Need To Do About It
If you’re a company that produces programming and you don’t control the entire distribution value chain, you want your programming on as many devices as possible. That means finding less destructive ways to fight your battles than pulling your apps from your competitor’s devices. The night is already dark and full of terrors. Why add finding out your favorite app is no longer on your favorite device to that situation.
2. Verizon Adds Netflix To FIOS
Verizon added Netflix to its FIOS set top box last month. The news was revealed in the usual Verizon manner, meaning someone at FierceCable figured out that a bunch of Verizon subscribers had Netflix integrated into their set top boxes, did a little digging and found this page on the Netflix help site that seems to confirm it.
Not that Verizon announced it or anything.
It’s unclear how many Verizon subscribers have the new Netflix integration, though our friend Dave Zatz from ZatzNotFunny thought it was probably a large percentage of them, since the boxes in question were first introduced in 2014.
Why It Matters
For a while now we’ve been saying we didn’t understand why other MVPDs were not taking Comcast’s lead and integrating Netflix into their set top box interfaces.
It’s a win all around: the MVPDs get increased stickiness and a carrot for cord cutters who only want broadband and Netflix.
Netflix gets free marketing (“sign up for FIOS and get three free months of Netflix!”) plus the chance to sign up thousands of technophobic seniors who want Netflix but wouldn’t have the first clue as to how to use a Roku. (Even if their kids set it up for them.)
And consumers get a single bill, a single interface and the ability to stop switching inputs as they move back and forth between the set top box and the Roku every time they want to watch Netflix.
What You Need To Do About It
If you’re an MVPD, you need to get on this now and integrate as many streaming services into your system as possible. They’re not going to steal viewers away from you and if anything, you can use them to sell faster internet speeds, which is pure profit for you.
If you’re a streaming channel, you want to do as many of these deals as possible for all the reasons stated above.
If you’re a network or studio, you want to remember to pull your content back from Netflix, because once they’re on the set top box, they really are competing with you, not to mention messing with your ability to monetize syndication.