Pixel Envy

Written by Nick Heer.

The Apple–Amazon Deal Helps Apple’s TV Ambitions

Dieter Bohn, the Verge:

Anyway, you can suss out the outlines of the deal that was struck. Amazon gets buy buttons inside its app for current Prime Video subscribers, Apple gets Amazon’s complete and total participation in the Apple TV features it cares about the most. Instead of just being yet another icon in the home screen grid, Amazon’s services are now deeply integrated into the user experiences Apple wants to move everybody towards.

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All of the above is why I’m comfortable saying that Amazon had leverage on Apple: Apple has clear incentives in the form of getting more participation in the Apple TV app and in getting a cut on the new subscribers it drives to Amazon. Amazon has the incentive of not paying more money to Apple.

Most of all, you can tell it’s about leverage simply because the Amazon Kindle app hasn’t changed. You can’t buy a Kindle book directly in the Kindle app, nor is Amazon even allowed to link to or even hint at the possibility that it has a whole damn Kindle store on its website where you can make one-click purchases.

The shrewdest quality of this deal is that it allows Amazon to exclude some of its in-app purchases from Apple’s usual cut while incentivizing people to more fully embrace Apple’s ecosystem.

The more I think about this, the more I think Apple comes out on top: in exchange for foregoing a cut of some of the occasional purchases made by Prime Video users, Apple gets a piece of subscriptions started through the Prime Video app, and users more fully embrace the Apple TV app. It’s great for users, too, as it results in a better experience.

But it is an unfair deal when compared to the typical App Store requirements. It is still undocumented and not available to everyone — even other providers of “premium subscription video entertainment”.