Amazon clashes with Disney over terms of offering apps in Fire TV

The dispute is one reason Fire TV has no deal in place to ship Disney +, an upcoming Disney streaming video service set to launch on November 1[ads1]2, said people familiar with the situation. The deadline for the calls was not clear.

Amazon Fire TV is an Internet-connected streaming media player that lets users stream content to the TVs from a variety of apps, including Amazon's own Prime Video,

Netflix Inc.,

Sling TV and offers from a variety of TV networks. It had 29% of the US streaming media box market in the second quarter, according to Strategy Analytics, behind only competing

Roku Inc.

The dispute highlights the complicated and sometimes tense relationships between streaming video distributors and content providers. Four TVs, Roku and other companies offering such set-top boxes or plug-in "sticks" have become important hubs to reach consumers who stream media, and increasingly play the role of cable companies in traditional TV. , cable providers have drawn up agreements with TV channels to transport these networks. The channels receive a portion of the consumers' monthly cable fees, and the cable providers often have access to part of the advertising time on the networks. Similarly, streaming distributors from the recent age have their own questions when negotiating the transport of streaming apps, such as a portion of the content company's advertising or subscription revenue.

A big difference: Cable operators in the United States individually cover a specific geographic footprint, and television programmers must negotiate with each of them, under the threat that if an agreement is not reached, channels may become black in these areas. In streaming, channels can distribute their programming across the country through a variety of set-top box players, and new entrants have recently joined the selection, including

Comcast Corp

Flex and a

Facebook Inc.

device called Portal.

"The traditional negotiations between cable operators and media companies are the most vicious negotiations I've ever been exposed to. And now you see the world colliding with these technical behemoths," says Steve Shannon, CEO of Tetra TV, which operates a marketplace for ads on video streaming.

People near the Disney-Amazon situation said it is not as promotional as a traditional cable car fight. Amazon and Disney spokeswomen declined to comment.

Device media device manufacturers have had a fight For example, up until this year, for example, Four TVs did not have Google's official YouTube app, while Google's Chromecast device did not offer the Amazon Prime Video app.

Now, the battles take higher stakes when entertainment companies like Disney face stagnant pay-TV businesses, placing greater emphasis on reaching audiences on digital platforms and increasingly competing with tech giants, for example, Disney + will go up against Amazon's Prime Video on the market, as will upcoming streaming services from

AT&T Inc.

WarnerMedia and Comcast & # 39; s NBCUniversal.

When Fire TV first launched, it allowed a number of media companies to have apps on their platform without sharing any advertising revenue, people said of the situation. But lately, Amazon has tightened the proposed terms in discussions with certain programmers, the people said.

Amazon's push for more advertising revenue from its partners is part of a broader effort to better monetize businesses outside the company's profit engine, cloud computing arm Amazon Web Services.

Now, Amazon is often beginning to request around 40% of its ad inventory from programmers, and negotiations often bring it down to 30% or 20%, according to people with knowledge of the company's deals. [19659004] Known apps utilize barter for more favorable conditions. Disney believes the popular apps – and the upcoming launch of Disney + – provide significant competition, and the company has not been keen to release any ad content to Amazon, people familiar with the company's overlays said.

Recently, the two sides have discussed a proposal where Disney would give up 10% of its advertising inventory, the people said.

Roku does business similarly. It often asks for 30% of the ad inventory in the channels it carries – a starting point for negotiations, said a person familiar with the matter. YouTube, the second most watched channel on Roku, does not share any of its ads with Roku, according to people familiar with the matter.

Some subscription-oriented services pay Roku for a lump sum when people sign up for the service through a Roku app, while others can pay on a recurring basis. Hulu, the Disney-controlled streaming service, provides Roku with about 15% of subscription revenue from customers who signed up for the service through Roku, a person familiar with the scheme said.

Although Disney + does not want ads, discussions with Amazon to carry it on Fire TV gave the tech giant an opportunity to go through ad terms for various other Disney apps. Disney does not want the distribution of the service reduced at launch, and Amazon will not miss offering a service that will include classic Disney movies, a series of Star Wars and Marvel content, the entire "The Simpsons" directory and more. [19659004] Disney has said that Disney + will be available for power on Apple TV, Android devices, Chromecast, iPads and iPhones, PS4, Roku and Xbox One.

Write to Dana Mattioli on dana. mattioli@wsj.com and Patience Haggin at patience.haggin@wsj.com