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Apple TV Finally Gets Amazon Prime Video

Amazon is playing nice with Apple as its own feud with Google heats up

By Brad Moon, InvestorPlace Contributor

http://bit.ly/2nBHnYa

Six months after it was first teased at WWDC 2017 — and just in time for holiday shopping — Apple Inc. (NASDAQ:AAPL) announced that Amazon.com, Inc (NASDAQ:AMZN) has released Amazon Prime Video on Apple TV.

Apple TV Finally Gets Amazon Prime Video
Source: Apple

The move comes just a day after Amazon’s feud with Google resulted in YouTube access being shut down for the Amazon Show smart speaker and Amazon’s Fire TV.

Apple Announces Amazon Prime Video on Apple TV

It’s been a while since Apple first told everyone that Prime Video would be coming to its Apple TV streamers. In fact, it was at WWDC 2017 in June that the company first told users to expect Amazon Prime Video on Apple TV.

That was a big deal and something that was expected to goose Apple TV sales, maybe even help to move the AAPL stock needle. Adding Prime Video to the mix would be a big piece of the puzzle — well, other than 4K content (since taken care of) and a skinny TV bundle (that’s another story altogether).

However, it’s been six months of crickets since then.

Yesterday, Apple sent out a press release announcing that the drought was over: Amazon Prime Video would now roll out on Apple TV. Here are the key details:

  • Amazon Prime Video app rolling out now in the U.S. and 100 other countries
  • Supported on Apple TV 4K and previous generation Apple TVs (I confirmed the Prime Video app is on a 2012-era 3rd generation Apple TV)
  • Amazon Prime Video integrated into the Apple TV app as well
  • Amazon Prime Video on Apple TV supports Siri voice search
  • 4K HDR Prime Video content available on Apple TV 4

The Importance of Prime Video to Apple TV Sales

Apple has a lot of plans for the Apple TV. There’s money to be made from selling the hardware, with the least expensive 4K Apple TV going for $179. At one point, the hardware was a billion-dollar business for Apple — still small potatoes when it comes to impact on AAPL stock — but a nice little business.

But the Apple TV is also seen as one of the primary products for driving Apple’s increasingly important Services revenue. And that Services division is one of the keys to AAPL stock growth in the long term. The more Apple TVs the company gets into living rooms, the more people are likely to rent or buy movies and TV shows, or buy an app to play on their TV. Each of those purchases adds to that Services revenue.

The problem in the past several years is that Apple TV has been more expensive than the competition while being stuck in the 1080p world and lacking access to a key streaming service — Amazon Prime Video. 

The lack of Prime Video was a bigger issue than you might think. It’s estimated that half of U.S. households have a Prime membership. That’s half of all households who would be giving up a free streaming video service by buying an Apple TV.

Technically, there are workarounds such as streaming the video on an iPad or iPhone, then streaming that to the Apple TV using AirPlay — but most consumers don’t want to be bothered with workarounds. They want the content all in one place.

What Amazon Prime Video Means for Apple TV

Apple addressed the 1080p issue when it finally introduced a 4K Apple TV with HDR support in September. And now, with Amazon Prime Video on Apple TV, the second big problem is addressed.

Price is still a sticking point — market leader Roku Inc (NASDAQ:ROKU) sells a 4K streamer for under $70 — but there’s always the slightly less expensive previous generation Apple TV for $149 as an option.

Having Amazon Prime Video on Apple TV is a big step for the two companies, but they’re not quite best friends yet. For example, you still can’t actually buy an Apple TV 4K from Amazon. But it’s a step in the right direction.

Who knows, with its current feud with Google escalating maybe Amazon will eventually start selling the Apple TV just to spite the YouTube owner. In the meantime, Apple has three more weeks of holiday shopping where it can push Apple TV sales, now with Prime video onboard.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/12/apple-tv-gets-amzaon-prime-video/.

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