Did Amazon’s Jeff Bezos Just Pull a ‘Bet the Company’ Move?

Published on Author Eli Fennell
Chromecast
Is Amazon Risking Its Core Business by Banning Chromecast and Apple TV?

Amazon will be banning sales of Chromecast, the Nexus Player, and Apple TV through their retail channel and partners.  Their official statement, which is best described as self-justifying drivel (putting it kindly), says in part,

“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.”

No one quite seems to be buying the argument, though.  There are many ways Amazon could ensure their customers aren’t confused, and if anything the only one seemingly confused is Amazon about why millions of people are choosing Chromecast and Apple TV, despite Amazon choosing not to support those platforms and thus creating the very “confusion” they speak of.

Amazon has even gone as far as to shut down 3rd party applications that circumvented the lack of Chromecast support, thus showing the ‘problem’ doesn’t really exist except because Amazon wants it to exist.  They could bring support for Prime Video to these competing platforms at any time they so choose.  They’ve also proven willing to allow competing products in other areas, such as eBook readers, without concern over ‘confusing’ anyone.

Quite apart from the fact that this is a naked ploy for market share, and arguably an anticompetitive abuse of the market power they wield, this is unprecedented in another way: they’re risking retaliation against their retail arm, the core of their business, in an attempt to boost an ancillary (if growing) part of their business: their media efforts with Prime Video.

Ironically, Amazon’s CEO Jeff Bezos warned against seemingly this exact kind of corporate behavior, in an interview about the failure of the Fire Phone.  In an interview with Business Insider, Bezos explained that he wasn’t too concerned about failing, because Amazon likes to foster an innovative atmosphere that encourages risk taking.

The one thing Bezos said he would never do, however, was risk a ‘bet-the-company’ move, a statement some readers immediately linked to Microsoft’s ex CEO Steve Ballmer, who described the launch of Windows 8 as a ‘bet-the-company’ moment.

The comparison is more-than-apt, I think.  Where Windows 8 failed was by trying to tie a lame duck to a majestic eagle in the hopes the latter would carry the former to glory.  Specifically, Windows 8 married Windows for PC’s to Windows Phone by forcing the UI of the latter onto the former and its users.  Windows 10 is, ultimately, the company’s mea culpa, bringing back the default desktop, the Start Menu, and other things removed or shoved into the background on 8.

The consumer spoke: mobile-style interfaces are great for mobile devices, but not productivity machines.  The failure of Windows 8 didn’t cause the failure of Windows Phone, that had already happened despite the company’s state of denial, but in a a very real way the failure of Windows Phone caused the failure of Windows 8, which struck right at the core of the company, undermining everything else including the Office franchise in the process.

By blocking sales of Chromecast and Apple TV, Amazon is also tying a duck to an eagle: Prime Video to their core retail business.  Amazon has never been accused of playing softball with their retail division, to be sure, but in the past their ‘sins’ have usually been in the form of driving down prices below profitability, or using better retail delivery service packages to bundle Trojan Horse services (e.g. Prime Video itself), or giving prominent promotional space to their own products.  Never before, however, have they compromised their role as the ‘retail homepage of the web’ in order to promote a side-project.

By blocking sales of Chromecast and Apple TV, Amazon is tying a duck to an eagle.Click To Tweet

In the process, they risk both damaging their reputations, and the backlash of fans of competing platforms and devices.  Millions of people will be buying their Apple TV’s and Chromecasts elsewhere, and perhaps thinking harder than they ever wanted to before now about whether an ‘All-In-With-Amazon’ strategy actually makes sense for them, or whether they should consider looking elsewhere for future purchases, cancelling their Prime subscriptions, etc…  Hell hath no fury like a fanboy scorned.

Hell hath no fury like a fanboy scorned.Click To Tweet

Until now, Amazon’s own ecosystem was something you could pick or choose from, like a buffet: maybe you like Prime Video but you also decided to buy a Chromecast to use with your Netflix or Hulu subscription, or maybe you have a Prime account for the free shipping, but you’re also an iPhone user so you bought an Apple TV, as well, and you could make these choices without Amazon protesting.  Although Amazon has its own small share of ‘fanatics’, it was also safe for fanatics of other platforms.

Not any longer.  This is a first step but, if they feel it’s successful, surely not the last step towards removing the choice to buy into whatever ecosystems and platforms you prefer.  Today Amazon doesn’t object to Xbox, but wait until a new ‘Fire Console’ hits the market and suddenly Amazon becomes concerned about customers getting ‘confused’ that they can’t play Amazon games on other consoles.

Buying from Amazon now means buying into their entire ecosystem: everything you buy either has to come from them, or be officially supported by them.  Any new market they enter, you will be forced to enter with them, or take your money elsewhere.  You will read the books they want you to, watch the movies they want you to, listen to the music they want you to, on the devices they want you to use.  If they decide to start selling dishes, you will be filling your cabinets with Fine Amazon China.

They will do this, if they can, because they can, which is to say they’ll do it as long as they can get away with it.  The only thing to stop them is the very thing that stopped the Fire Phone: not letting them force their ecosystem onto us by not buying into it.  Normally they might get away with doing something like this relatively unscathed, but in this case, while banning Chromecast alone would have been bad enough, banning Apple TV as well risks one certain reaction: fanboy outrage.

Apple is a brand around which a certain special type, much written about (and not hard to observe for yourself at any Apple Store on launch day), of fanatical devotion exists.  Ever since the ‘Mac Attack’ squads organized by Guy Kawasaki, former Apple Product Evangelist, to troll anyone being critical of Mac computers, and perhaps even before then, to attack Apple has been to invite the wrath of its fans.

Nowadays, those fans aren’t some fringe sector of society, either: they’re part of the segment of society with the largest amount of cash to spend on electronic ‘lifestyle brand’ products.  They’ve thrown so much money at Apple, that their cash hoard frankly exceeds the wildest dreams of avarice.  These same people throw a lot of money at Amazon, including to purchase Apple products, but also paying for Prime, buying console devices, buying streaming devices, and more.

Google also has its fair share of fanatics and brand loyalists, and while these may control less purchasing power, they’re also more likely to be thrifty consumers on a budget and, thus, likely to use Amazon for its low prices.

It’s therefore pretty risky for Amazon to do something which so blatantly tries to force these users to buy into the Amazon ecosystem instead of the ecosystems they prefer, when they’re already buying into the Amazon ecosystem in addition to those other ecosystems, whose products they’re also buying through Amazon.  Amazon is forcing customers to choose their retail loyalties based on their platform loyalties, and taking on two of the world’s most powerful brands in the process.

When iSheep and Fandroids find themselves united against a common threat, whoever volunteered themselves to be that common threat must be suicidal.

Amazon is forcing customers to choose retail loyalties based on platform loyalties.Click To Tweet

Jeff Bezos, if only by allowing this to happen, regardless whether it was his idea or not, is ‘betting-the-company’, then, in a very real sense: risking undermining the core retail business upon which their empire is built by dragging it into the platform wars.  This could even force fans of other platforms into using alternative retail services… including, ironically, Google Shopping!

I love technology and how it changes our lives. There's something almost spiritual about how new technologies connect and empower us. And it's really cool, too.

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