Amazon is demanding a 30% cut of ad sales on Fire TV by requiring networks and publishers whose apps feature there to hand over ad space for it to sell.
The requirement appears in new terms of contract from the e-commerce giant, AdAge reported.
In the past, Amazon allowed publishers to sell their own ads and keep all the revenue. But that changed in September with no announcement. Under the new terms, Amazon gets 30% of inventory and keeps all revenue it generates from that share – and TV network executives are far from happy.
“This is going to get complicated,” one major network executive told AdAge. “Ad revenue was never part of the discussion, and now all of a sudden it is.”
Many of the media companies that own the apps are big names in TV, such as Fox, NBC, CBS, ABC, Turner and Viacom.
Roku offers similar terms to apps on its devices and takes 30% of inventory. “It’s a common thing,” one digital streaming executive explained. “That’s the fee to be on the platform – giving up a percentage of the ad revenue.”
Amazon is also reported to have told media companies that from next year they will need to use its ad network, rather than any other, to serve all commercials appearing on Fire TV.
Some 48.6 million households in the US have a Fire TV device (an increase of 21% since 2017), according to eMarketer. These make up over a quarter of the connected TV audience, which has become a hotly competitive and crowded market – attracting the likes of Google, Facebook, Roku, TV networks and telecom companies, as well as Amazon.
Over the past year, Amazon has been increasing ad sales on its own sites and further afield – last quarter it’s reported to have reached $2.5bn in ad revenue, up 120% year on year. That figure makes the company the third biggest US digital advertiser, behind Google and Facebook.
Amazon declined to comment on its new terms, but supplied a copy to AdAge. They state: “Effective as of September 30, 2018 Fire TV Ad-Enabled Apps must integrate with Amazon Publisher Services (APS). Fire TV Ad-Enabled Apps must provide 30% of total advertising impressions in the app to Amazon.”
The requirement appears in new terms of contract from the e-commerce giant, AdAge reported.
In the past, Amazon allowed publishers to sell their own ads and keep all the revenue. But that changed in September with no announcement. Under the new terms, Amazon gets 30% of inventory and keeps all revenue it generates from that share – and TV network executives are far from happy.
“This is going to get complicated,” one major network executive told AdAge. “Ad revenue was never part of the discussion, and now all of a sudden it is.”
Many of the media companies that own the apps are big names in TV, such as Fox, NBC, CBS, ABC, Turner and Viacom.
Roku offers similar terms to apps on its devices and takes 30% of inventory. “It’s a common thing,” one digital streaming executive explained. “That’s the fee to be on the platform – giving up a percentage of the ad revenue.”
Amazon is also reported to have told media companies that from next year they will need to use its ad network, rather than any other, to serve all commercials appearing on Fire TV.
Some 48.6 million households in the US have a Fire TV device (an increase of 21% since 2017), according to eMarketer. These make up over a quarter of the connected TV audience, which has become a hotly competitive and crowded market – attracting the likes of Google, Facebook, Roku, TV networks and telecom companies, as well as Amazon.
Over the past year, Amazon has been increasing ad sales on its own sites and further afield – last quarter it’s reported to have reached $2.5bn in ad revenue, up 120% year on year. That figure makes the company the third biggest US digital advertiser, behind Google and Facebook.
Amazon declined to comment on its new terms, but supplied a copy to AdAge. They state: “Effective as of September 30, 2018 Fire TV Ad-Enabled Apps must integrate with Amazon Publisher Services (APS). Fire TV Ad-Enabled Apps must provide 30% of total advertising impressions in the app to Amazon.”
Sourced from AdAge; additional content by WARC staff
