Streaming With the Enemy: How Connected TV Rivals Learned to Work Together

Amazon Fire and Roku are connected TV rivals, with the two platforms taking a combined 50% share of big screen CTV viewing last year. That’s why it has been a surprise to see the two become partners in recent months. Amazon’s IMDb TV channel was added to Roku in January, three months after The Roku Channel made its way to Amazon Fire TV. And those aren’t the only CTV competitors that have suddenly found themselves working together. In February, Apple TV, which had previously been added to Roku and Amazon, arrived on Google’s newest Chromecast device and will soon be featured on Google TVs made by Sony and TCL. “It is one of the most shocking developments of the tvOS wars,” LightShed Partners media analyst Rich Greenfield said. “No one would have believed five years ago that Amazon’s app would be on Apple, and Apple’s app would be on Amazon.” The big screen itself is king, and companies are beginning to recognize the value of scaling up on other platforms—even those of their biggest rivals. “Looking at the frenemy relationship between hardware guys and the platforms, they all see the writing on the wall: that the televisions themselves are the endgame,” Travis Lusk, head of Ebiquity Tech, a consultancy that helps advertisers measure and quantify platform buys, told Adweek. “They know that the TV itself is going to win at the end of the day.” As content costs continue to rise, it no longer makes sense to spend several billion dollars on content, only to restrict its availability to a select subset of devices. And on the consumer side, walled gardens that have historically dominated are no longer being tolerated. “Apple TV+ cannot be a successful streaming service if you have to have an Apple device,” said Greenfield. “The content is so expensive, and people are not going to go out and buy a new TV every year.” Right now, the land grab for CTV players is to simply increase eyeballs. “A No. 1 priority is to get a subscriber even if it's not a paid experience,” explained Lusk. “They’ve captured that information, and then have that as a strategic asset going forward.” Roku dominates the CTV market, representing a 38% share of all smart TVs sold. Its ad-supported, in-house content offering The Roku Channel first rolled out in 2017 and ended in 2020 reached an estimated 63 million people in U.S. households. By increasing its scale through distribution deals with other players, that consumer base will only continue to rise. Connected Competitors The biggest CTV platforms have begun partnering with rivals to carry their in-house content offerings: The Roku Channel: Roku’s AVOD landed on Amazon Fire TV last October. IMDb TV: Amazon’s channel was added to Roku in January and Google’s Chromecast in February. Apple TV: The Apple app arrived on Amazon Fire TV, Roku and Samsung in October 2019. It expanded to Vizio and Samsung last October. Tedd Cittadine, vp of content partnerships at Roku, said that companies are embracing change to traditional distribution and content availability structures, giving more value to consumers while simultaneously creating more for themselves. After all, when consumers watch ad-supported publishers, the platforms can sell some of the publisher’s inventory in exchange for the extended audience reach. Excluding YouTube, Roku takes a percentage of advertising revenue on all ad-supported apps, plus a slice of subscription revenue from new subscribers. That means AVOD content “actually benefits from a broad distribution model across multiple platforms rather than from narrow exclusivity on one platform,” Cittadine said. Amazon Fire TV reaches more than 50 million monthly active users. The company told Adweek that by expanding IMDb TV app distribution to third-party devices, it’s a win for both customers in terms of access to content and advertisers, as they can deliver more OTT viewers across its content destinations. Already, both Amazon and Roku have seen rapid growth of their respective AVOD streaming content. Amazon’s AVOD viewing hours increased by 500% in 2020, while The Roku Channel more than doubled in viewership year over year. Those numbers should continue to grow as the CTV players expand partnerships. “Going forward, we’ll continue to see content providers and platforms work together to innovate for better user experiences, enhanced advertising-based business models and advertising technologies, and improved user acquisition methods,” Cittadine said. But Greenfield, who believes that buying through platforms like Roku will be the future of CTV buys, thinks it’s only a matter of time before the competitive juices start flowing again. While the short-term plan is “complementary, the long-term plan is keep getting bigger and bigger and better and better at selling ads, and more data and better ROI and better performance … It’s setting up to be an increasing battleground opportunity where it’s going to be interesting.”