If the best portable TV is an iPad, Google's got trouble
Filed under: Investing
Last Wednesday, the e-tailer officially made its Amazon Instant Video service available to tens of millions of iPad users. The service mirrors Netflix, allowing Amazon Prime users to stream a wide range of titles at their leisure.
Lights Out for the Kindle Fire?
There are minor differences between the two platforms. For example, Apple's iTunes interface for the iPad makes it easy to purchase and download new films or shows straight from your device. Amazon, by contrast, forces consumers to shop and buy on its website and then link with the iPad via its Instant Video app.
Apple asks those who buy books through Barnes & Noble's Nook store to jump through similar hoops. The Mac maker also has yet to allow Amazon videos to take advantage of Air Play, an iPad feature that allows users to start a movie on an iPad and wirelessly transfer it to a television.
But are these limitations so bad when all it takes is a few clicks to get a cool new movie automatically synced to your iPad?
Amazon also gives customers the choice of purchasing streaming content (good for instant viewing when the user is hooked up to a fast WiFi connection) or downloading (i.e., preloading content before unplugging from the Internet and watching later).
Mix in content from Netflix, Hulu, and HBO, and it's possible Apple has invented the world's most interesting portable television.
Back to the E-Shelves
All of this, ironically, raises a troubling question for Amazon: Why would anyone want a Kindle Fire when all the same content and more is going to the iPad?
Yet Amazon may not be worried. The e-tailer derives most of its profit from content sales, after all, and many reports said the company sold the Fire at a loss. Amazon only needed the device to entice consumers to buy from its Instant Video store. Once they've built up a digital library, it doesn't matter what device viewers use to access their content.
For Apple, putting Amazon Instant Video on the iPad creates a fresh incentive for shoppers to buy its more expensive devices. And that's important. Unlike Amazon.com, which at less than a 1% net margin and depends on huge sales volume in order to make money, Apple nets more than $0.25 for every dollar of revenue it generates. Big-ticket hardware sales are responsible for the cushion.
Does this mean we can expect Amazon to dump the Fire? In a few years, perhaps. Right now the device is doing exactly what it's supposed to: Sell more content for Amazon.
Let the Tablet Battles Begin (Again)!
Because the Fire is an Android-based device, we've long hoped Amazon would expand Instant Video access to other Android tablets. Those hopes now appear to have been dashed.
Why would Amazon expand beyond the iPad? Google is competing with the e-tailer by introducing a new tab of its own, the Nexus 7, built in conjunction with Samsung.
Google has its reasons for targeting the Fire. For one, Amazon's tablet is an Android device in name only. Users purchase via an Amazon account, rather than Google's Wallet. Nor does the Fire support the search king's Google Play stores for books, music, and video. Amazon doesn't want a third party capturing sales it otherwise might claim.
Google is just as greedy with the Nexus Q. The search specialist's set-top box limits users to YouTube programming and content available in Google's own stores. By contrast, Apple TV already has Netflix and Hulu Plus, in addition to everything in iTunes. Turning on AirPlay for Amazon content streaming on an iPad could make the nexus Q irrelevant.
Google seems fine with fighting it out with both Amazon and Apple. Maybe that's a good strategy.
Just don't be surprised if these newfound frenemies -- blessed as they are with a huge combined customer base, attractive device offerings, and strategic streaming partnerships with Hulu and Netflix -- make it a bloody battle for their common foe.
This article originally appeared on Dailyfinance.com.
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