Amazon has told broadcasters that it will require a 30% cut of any revenue that broadcasters earn.
👉 Background: Amazon Fire TV is one of the MANY products in the Amazon suite. This is the device that plugs into a TV and allows customers to stream audio and video content via the internet (Think: 7mate, Netflix, Stan, Kayo, etc.). It's believed to control 3-4% of the TV operating system market in Australia.
👉 What happened: Now, Amazon has told broadcasters that it will require a 30% cut of any revenue that broadcasters earn, if someone watches TV via the Fire TV operating system. So if there's an ad on 7mate watched via Fire TV, that'll be 30% for Amazon. And it will start charging in less than 3 weeks.
👉 What else: Broadcasters fear that if they don't pay the revenue-share, they may be de-listed or downgraded within the Amazon app stores for platforms like Fire TV.
💡 Revenue sharing models are common commercial models where different parties are compensated for their contribution to a sale.
💡These arrangements can be beneficial when it helps both parties grow and reach new audiences, but it can become problematic when one party holds more leverage (ahem Amazon).
💡 The big fear for networks is that Amazon's aggressive strategy could set a dangerous precedent; if other big players like Google, Samsung, and LG follow suit, it could dramatically impact the business model of free-to-air television.
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