The Apple TV platform, tvOS, and the original Apple TV app were initially intended to solve this problem by offering an a la carte, consumer-friendly way to manage the options in a burgeoning streaming-TV industry.
However, Apple’s attempt to make the TV app a universal hub of content has been continually stymied by the fact that industry giant Netflix has declined to participate.
Users of the TV app and Apple TV set-top-box still must launch a separate Netflix app to see their watch history on that service, or to see if movies or shows they want to watch are available. Content from most other services—including Amazon Prime Video—is exposable through search within the app and rolls into a unified watch history.
Fighting to succeed in a messy business
Further, streaming services have become increasingly expensive, and streamers have begun trying to find new revenue from sources like bundles and advertising. The reasons for these trends are complex, but one of the key problems is that scripted television content is immensely expensive to produce—especially as the prestige TV era has driven up viewer expectations in terms of quality and production values.
As an early leader in the industry, Netflix established unrealistic expectations for everyone involved—consumers, production houses, investors, and so on—by simply throwing immense amounts of money into content without immediately seeing a return.
When larger economic factors put an end to that practice, streamers had to adjust—including Apple, which among other things is tweaking its film strategy for the new landscape.
Apple still offers several of those central hub features—for example, you can subscribe to services like Paramount+ and launch their shows from the Apple TV app, just like Amazon is doing with its app and Apple TV+ here. But the realities of the mess the industry finds itself in have clearly led Apple to keep an open mind about how it can attract and retain viewers.
The National Labor Relations Board (NLRB) has filed charges against Amazon, alleging that the e-commerce giant has illegally refused to bargain with a union representing drivers who are frustrated by what they claim are low wages and dangerous working conditions.
Back in August, drivers celebrated what they considered a major win when the NLRB found that Amazon was a joint employer of sub-contracted drivers, cheering “We are Amazon workers!” At that time, Amazon seemed to be downplaying the designation, telling Ars that the union was trying to “misrepresent” a merit determination that the NLRB confirmed was only “the first step in the NLRB’s General Counsel litigating the allegations after investigating an unfair labor practice charge.”
Amazon has found itself in increasingly hot water ever since the Palmdale drivers joined the International Brotherhood of Teamsters union in 2021. The NLRB’s complaint called out Amazon for terminating its contract with the unionized drivers without ever engaging in bargaining.
The tech company could have potentially avoided the NLRB charges if Amazon had settled with drivers, who claimed that rather than negotiate, Amazon had intimidated employees with security guards and illegally retaliated against workers unionizing.
Although Amazon recently invested $2.1 billion—its “biggest investment yet”—to improve driver safety and increase drivers’ wages, Amazon apparently did not do enough to settle drivers’ complaints.
The NLRB said in a press release sent to Ars that the complaint specifically alleged that “Amazon failed and refused to bargain” with Teamsters “and that it did not afford the union the opportunity to bargain over the effects of terminating” the Palmdale drivers’ contract, “increasing inspections, reducing and termination routes, and terminating employees in the bargaining unit.” Additionally, “the complaint further alleged that Amazon made unlawful threats and promises, held captive audience meetings, delayed employee start times and increased vehicle inspections to discourage union activities, and failed and refused to furnish information to the union.”
Enlarge/ A still from Wolfs, an Apple-produced film starring George Clooney and Brad Pitt.
Apple
For the past few years, Apple has been making big-budget movies meant to compete with the best traditional Hollywood studios have to offer, and it has been releasing them in theaters to drive ticket sales and awards buzz.
Much of that is about to change, according to a report from Bloomberg. The article claims that Apple is “rethinking its movie strategy” after several box office misfires, like Argylle and Napoleon.
It has already canceled the wide theatrical release of one of its tent pole movies, the George Clooney and Brad Pitt-led Wolfs. Most other upcoming big-budget movies from Apple will be released in just a few theaters, suggesting the plan is simple to ensure continued awards eligibility but not to put butts in seats.
Further, Apple plans to move away from super-budget films and to focus its portfolio on a dozen films a year at lower budgets. Just one major big-budget film is planned to get a wide theatrical release: F1. How that one performs could inform future changes to Apple’s strategy.
The report notes that Apple is not the only streamer changing its strategy. Netflix is reducing costs and bringing more movie production in-house, while Amazon is trying (so far unsuccessfully) to produce a higher volume of movies annually, but with a mixture of online-only and in-theater releases. It also points out that movie theater chains are feeling ever more financial pressure, as overall ticket sales haven’t matched their pre-pandemic levels despite occasional hits like Inside Out 2 and Deadpool & Wolverine.
Cinemas have been counting on streamers like Netflix and Apple to crank out films, but those hopes may be dashed if the media companies continue to pull back. For the most part, tech companies like Apple and Amazon have had better luck gaining buzz with television series than with feature films.
Enlarge/ Warehouse workers at the STL8 Amazon Fulfillment Center marched on the boss Wednesday to demand a $25 an hour minimum wage for all workers.
via Justice Speaks
Amazon currently faces disgruntled workers in every direction.
Office workers are raging against CEO Andy Jassy’s return to office mandate, Fortune reported—which came just as a leaked document reportedly showed that Amazon is also planning to gut management, Business Insider reported. Drivers by the hundreds are flocking to join a union to negotiate even better work conditions, CNBC reported, despite some of the biggest concessions in Amazon’s history. And hundreds more unionized warehouse workers are increasingly banding together nationwide to demand a $25 an hour minimum wage. On Wednesday, workers everywhere were encouraged to leave Jassy a voicemail elevating workers’ demands for a $25 minimum wage.
Putting on the pressure
This momentum has been building for years after drivers unionized in 2021. And all this collective fury increasingly appears to be finally pressuring Amazon into negotiating better conditions for some workers.
Just last week, Amazon ponied up $2.1 billion—its “biggest investment yet”—to improve driver safety and increase drivers’ wages.
Unionizing warehouse workers told Ars that they’re seeking a similar investment from Amazon, which currently pays on average a $20.50 minimum wage.
“We work at a breakneck pace,” Christine Manno, an Amazon Fulfillment Center worker at Amazon site STL8 in St. Louis, Missouri, who was injured and never expects to work again, told Ars. “We put smiles on the billionaire’s faces, and we feel it’s prime time for a real raise for the employees. There’s too many of us struggling with food and housing, yet Andy Jassy took home over $14,000 an hour last year and Amazon is making billions in profit.”
On Wednesday, Amazon seemed to finally bend to the warehouse workers’ pressure, announcing a compromise on wage increases. The company said it was investing $2.2 billion to raise the base salaries of hourly fulfillment workers to “more than $22 an hour, and more than $29 an hour including benefits,” Reuters reported. Amazon’s spokesperson told Ars that STL8 workers’ starting wage “increased to $19 per hour coupled with our industry-leading benefits” and claimed that the company’s “biggest ever investment” in fulfillment workers was simply “part of an annual process where we review wages and benefits to ensure they stay competitive—and in many cases industry-leading.”
But while workers claimed the victory, they’re not going to sit back and take the pay bump. An STL8 worker on the organizing committee with Manno, Ash Judd, told Ars that workers “made this $1.50 raise happen through our tireless organizing, and we’ll keep fighting until we reach $25.”
Because of recent gains and the increasingly dire economic plight of workers, Amazon workers likely won’t be easing off the e-commerce giant any time soon. Some office workers told Fortune they are seeking other remote work to avoid returning to the office, threatening to “soft quit” and claiming that Amazon is going “backwards” with a stricter office policy than pre-COVID times. “This is a layoff in disguise,” one apparent worker complained on Reddit. “Return to the office or you’re fired and we don’t have to pay any severance or unemployment.”
With so many workers upset, it could now be a question of when Amazon will cave to their growing demands—not if—according to Beth Gutelius, the research director of the University of Illinois Chicago’s Center for Urban Economic Development.
“Research shows that the presence of collective bargaining agreements creates upward pressure on wages and working conditions, both in facilities that are unionized and those that are not,” Gutelius told Ars. “Based on that evidence, I would expect working conditions at Amazon to improve.”
Gutelius co-authored a May report documenting the financial insecurity of Amazon warehouse workers by surveying more than 1,400 across 42 states.
Enlarge/ A promotional image for Amazon’s 4-Series Fire TVs.
A lawsuit is seeking to penalize Amazon for allegedly providing “fake list prices and purported discounts” to mislead people into buying Fire TVs.
As reported by Seattle news organization KIRO 7, a lawsuit seeking class-action certification and filed in US District Court for the Western District of Washington on September 12 [PDF] claims that Amazon has been listing Fire TV and Fire TV bundles with “List Prices” that are higher than what the TVs have recently sold for, thus creating “misleading representation that customers are getting a ‘Limited time deal.'” The lawsuit accuses Amazon of violating Washington’s Consumer Protection Act.
The plaintiff, David Ramirez, reportedly bought a 50-inch 4-Series Fire TV in February for $299.99. The lawsuit claims the price was listed as 33 percent off and a “Limited time deal” and that Amazon “advertised a List Price of $449.99, with the $449.99 in strikethrough text.” As of this writing, the 50-inch 4-Series 4K TV on Amazon is marked as having a “Limited time deal” of $299.98.
Camelcamelcamel, which tracks Amazon prices, claims that the cheapest price of the TV on Amazon was $280 in July. The website also claims that the TV’s average price is $330.59; the $300 or better deal seems to have been available on dates in August, September, October, November, and December of 2023, as well as in July, August, and September 2024. The TV was most recently sold at the $449.99 “List Price” in October 2023 and for short periods in July and August 2024, per Camelcamelcamel.
Enlarge/ The 50-inch 4-Series Fire TV’s Amazon price history, according to Camelcamelcamel.
Amazon’s website has an information icon next to “List Prices” that, when hovered over, shows a message stating: “The List Price is the suggested retail price of a new product as provided by a manufacturer, supplier, or seller. Except for books, Amazon will display a List Price if the product was purchased by customers on Amazon or offered by other retailers at or above the List Price in at least the past 90 days. List prices may not necessarily reflect the product’s prevailing market price.”
The lawsuit against Amazon alleges that Amazon is claiming items were sold at their stated List Price within 90 days but were not:
… this representation is false and misleading, and Amazon knows it. Each of the Fire TVs in this action was sold with advertised List Price that were not sold by Amazon at or above those prices in more than 90 days, making the above statement, as well as the sales prices and percentage discounts, false and misleading. As of September 10, 2024, most of the Fire TVs were not sold at the advertised List Prices since 2023 but were instead consistently sold well below (often hundreds of dollars below) the List Prices during the class period.
When contacted by Ars Technica, an Amazon spokesperson said that the company doesn’t comment on ongoing litigation.
The lawsuit seeks compensatory and punitive damages and an injunction against Amazon.
“Amazon tricks its customers”
The lawsuit claims that “misleading” List Prices harm customers while also allowing Amazon to create a “false” sense of urgency to get a discount. The lawsuit alleges that Amazon has used misleading practices for 15 Fire TV models/bundles.
The lawsuit claims that in some cases, the List Price was only available for “an extremely short period, in some instances as short as literally one day.“
The suit reads:
Amazon tricks its customers into buying Fire TVs by making them believe they are buying Fire TVs at steep discounts. Amazon omits critical information concerning how long putative “sales” would last, and when the List Prices were actually in use, which Plaintiff and class members relied on to their detriment. Amazon’s customers spent more money than they otherwise would have if not for the purported time-limited bargains.
Further, Amazon is accused of using these List Price tactics to “artificially” drive Fire TV demand, putting “upward pressure on the prices that” Amazon can charge for the smart TVs.
The legal document points to a similar 2021 case in California [PDF], where Amazon was sued for allegedly deceptive reference prices. It agreed to pay $2 million in penalties and restitution.
Other companies selling electronics have also been scrutinized for allegedly making products seem like they typically and/or recently have sold for more money. For example, Dell Australia received an AUD$10 million fine (about $6.49 million) for “making false and misleading representations on its website about discount prices for add-on computer monitors,” per the Australian Competition & Consumer Commission.
Now’s a good time to remind friends and family who frequently buy tech products online to use price checkers like Camelcamelcamel and PCPartPicker to compare products with similar specs and features across different retailers.
Enlarge/ Generative AI Alexa asked to make a taco poem.
The previously announced generative AI version of Amazon’s Alexa voice assistant “will be powered primarily by Anthropic’s Claude artificial intelligence models,” Reuters reported today. This comes after challenges with using proprietary models, according to the publication, which cited five anonymous people “with direct knowledge of the Alexa strategy.”
Amazon demoed a generative AI version of Alexa in September 2023 and touted it as being more advanced, conversational, and capable, including the ability to do multiple smart home tasks with simpler commands. Gen AI Alexa is expected to come with a subscription fee, as Alexa has reportedly lost Amazon tens of billions of dollars throughout the years. Earlier reports said the updated voice assistant would arrive in June, but Amazon still hasn’t confirmed an official release date.
Now, Reuters is reporting that Amazon will no longer use its own large language models as the new Alexa’s primary driver. Early versions of gen AI Alexa based on Amazon’s AI models “struggled for words, sometimes taking six or seven seconds to acknowledge a prompt and reply,” Reuters said, citing one of its sources. Without specifying versions or features used, Reuters’ sources said Claude outperformed proprietary software.
In a statement to Reuters, Amazon didn’t deny using third-party models but claimed that its own tech is still part of Alexa:
Amazon uses many different technologies to power Alexa.
When it comes to machine learning models, we start with those built by Amazon, but we have used, and will continue to use, a variety of different models—including (Amazon AI model) Titan and future Amazon models, as well as those from partners—to build the best experience for customers.
Amazon has invested $4 billion in Anthropic (UK regulators are currently investigating this). It’s uncertain if Amazon’s big investment in Anthropic means that Claude can be applied to Alexa for free. Anthropic declined to comment on Reuters’ report.
The new Alexa may be delayed
On Monday, The Washington Post reported that Amazon wants to launch the new Alexa in October, citing internal documents. However, Reuters’ sources claimed that this date could be pushed back if the voice assistant fails certain unspecified internal benchmarks.
The Post said gen AI Alexa could cost up to $10 per month, according to the documents. That coincides with a June Reuters report saying that the service would cost $5 to $10 per month. The Post said Amazon would finalize pricing and naming in August.
But getting people to open their wallets for a voice assistant already associated with being free will be difficult (free Alexa is expected to remain available after the subscription version releases). Some Amazon employees are questioning if people will really pay for Alexa, Reuters noted. Amazon is facing an uphill battle with generative AI, which is being looked at as a last shot for Alexa amid big competition and leads from other AI offerings, including free ones like ChatGPT.
In June, Bank of America analysts estimated that Amazon could make $600 million to $1.2 billion in annual sales with gen AI Alexa, depending on final monthly pricing. This is under the assumption that 10 percent of an estimated 100 million active Alexa users (Amazon says it has sold 500 million Alexa-powered gadgets) will upgrade. But analysts noted that free alternatives would challenge the adoption rate.
The Post’s Monday report said the new Alexa will try winning over subscribers with features like AI-generated news summaries. This Smart Briefing feature will reportedly share summaries based on user preferences on topics including politics, despite OG Alexa’s previous problems with reporting accurate election results. The publication also said that gen AI Alexa would include “a chatbot aimed at children” and “conversational shopping tools.”
Amazon may be forced to meet some unionized delivery drivers at the bargaining table after a regional National Labor Relations Board (NLRB) director determined Thursday that Amazon is a joint employer of contractors hired to ensure the e-commerce giant delivers its packages when promised.
This seems like a potentially big loss for Amazon, which had long argued that delivery service partners (DSPs) exclusively employed the delivery drivers, not Amazon. By rejecting its employer status, Amazon had previously argued that it had no duty to bargain with driver unions and no responsibility for alleged union busting, The Washington Post reported.
But now, after a yearlong investigation, the NLRB has issued what Amazon delivery drivers’ union has claimed was “a groundbreaking decision that sets the stage for Amazon delivery drivers across the country to organize with the Teamsters.”
In a press release reviewed by Ars, the NLRB regional director confirmed that as a joint employer, Amazon had “unlawfully failed and refused to bargain with the union” after terminating their DSP’s contract and terminating “all unionized employees.” The NLRB found that rather than bargaining with the union, Amazon “delayed start times by grounding vans and not preparing packages for loading,” withheld information from the union, and “made unlawful threats.” Teamsters said those threats included “job loss” and “intimidating employees with security guards.”
Sean M. O’Brien, the Teamsters general president, claimed the win for drivers unionizing not just in California but for nearly 280,000 drivers nationwide.
“Amazon drivers have taken their future into their own hands and won a monumental determination that makes clear Amazon has a legal obligation to bargain with its drivers over their working conditions,” O’Brien said. “This strike has paved the way for every other Amazon worker in the country to demand what they deserve and to get Amazon to the bargaining table.”
Unless a settlement is reached, the NLRB will soon “issue a complaint against Amazon and prosecute the corporate giant at a trial” after finding that “Amazon engaged in a long list of egregious unfair labor practices at its Palmdale facility,” Teamsters said.
Apparently downplaying the NLRB determination, Amazon is claiming that the Teamsters are trying to “misrepresent what is happening here.” Seemingly Amazon is taking issue with the union claiming that an NLRB determination on the merits of their case is a major win when the NLRB has yet to issue a final ruling.
According to the NLRB’s press release, “a merit determination is not a ‘Board decision/ruling’—it is the first step in the NLRB’s General Counsel litigating the allegations after investigating an unfair labor practice charge.”
Amazon’s spokesperson, Eileen Hards, told Ars that the NLRB office confirmed to Amazon that it will be “dismissing most of the Teamsters’ more significant claims it filed last year in Palmdale.” That apparently includes dismissing the Teamsters’ claims that Amazon unlawfully terminated its contract with one of their DSPs and that Amazon had a legal obligation to honor the Teamsters’ contract with that DSP.
Next, the NLRB will determine if the “remaining allegations should be decided by an administrative law judge,” Hards said. After that, Amazon will have opportunities to appeal any unfavorable rulings, first to the Board and then to a federal appeals court, the NLRB confirmed to Ars.
Hards confirmed that Amazon still expects all the Teamsters’ remaining claims will be dismissed.
“As we have said all along, there is no merit to the Teamsters’ claims,” Hards told Ars. “If and when the agency decides it wants to litigate the remaining allegations, we expect they will be dismissed as well.”
But Hards declined to comment on the impacts of the NLRB’s determination that Amazon is a joint employer of the unionized delivery drivers.
One Amazon driver in Palmdale, Jessie Moreno, said that worker conditions for Amazon drivers could improve because of the determination.
“Amazon can no longer dodge responsibility for our low wages and dangerous working conditions, and it cannot continue to get away with committing unfair labor practices,” Moreno said. “We are Amazon workers, and we are holding Amazon accountable.”
Amazon drivers uniting “like never before”
The NLRB determination came following a complaint from 84 Amazon workers from Palmdale, California, who became the first Amazon delivery drivers to unionize in April 2023, represented by Teamsters Local 396.
While their DSP recognized the union, workers launched an unfair labor strike in June 2023 after Amazon allegedly “engaged in dozens of unfair labor practices in violation of federal labor law in an effort to quash workers’ organizing efforts,” the Teamsters said.
The picket line quickly expanded “to over 50 Amazon warehouses across 10 states,” the Teamsters said. Most recently, drivers in Skokie, Illinois, “launched their own unfair labor practice strike in June 2024,” right around the same time that “more than 5,500 members of the Amazon Labor Union in New York voted by an overwhelming 98.3 percent to affiliate with the Teamsters.”
In their blog, the Teamsters said that Amazon “has avoided responsibility for its drivers through its DSP subcontractor business model” since 2018, but drivers hope that yesterday’s NLRB determination could put an end to the dodgy tactic.
“The NLRB’s joint employer determination shatters that myth” that “DSP drivers are not official employees of Amazon” and “makes clear that through its DSP business model, Amazon exercises widespread control over drivers’ labor and working conditions, making Amazon the drivers’ employer,” the Teamsters said.
The Teamsters said that they are “confident” that “the NLRB’s regional determination for the Palmdale workers will extend to Amazon DSP drivers who unionize nationwide.” One union member and Amazon driver, Brandi Diaz, celebrated what she considered to be the US government recognizing that the DSP program is a “sham.”
“We wear Amazon uniforms, we drive Amazon vans, and Amazon controls every minute of our day,” Diaz said. “Amazon can no longer have all the benefits of their own fleet of drivers without the responsibilities that come with it. The time has come for Amazon drivers across the country to organize with the Teamsters and demand what we deserve.”
Drivers are currently fighting to increase wages and improve driver safety amid what they claim are unchecked dangerous conditions they must navigate as Amazon drivers. Moreno said that the NLRB determination was a significant step toward unionizing more drivers and ending Amazon’s allegedly unfair labor practices nationwide.
“We have been on strike to stop Amazon’s lawbreaking and we are winning at the NLRB, while we are uniting Amazon workers across the country like never before,” Moreno said.
In September of 2023, Amazon announced the Echo Show 8 Photos Edition. It looked just like the regular Echo Show 8 smart display/speaker but cost $10 more. Why? Because of its ability to show photos on the home screen for as long as you want—if you signed up for a $2 monthly subscription to Amazon’s PhotosPlus. Now, about a year after releasing the Echo Show 8 Photos Edition, Amazon is announcing that it’s discontinuing PhotosPlus. That means Echo Show 8 Photos Edition users will be forced to see ads instead of their beloved pics.
As per The Verge yesterday, Amazon started sending PhotosPlus subscribers emails saying that it will automatically cancel all PhotosPlus subscriptions on September 12 and will stop supporting PhotosPlus as of September 23. PhotosPlus, per Amazon’s message, “makes photos the primary home screen content you see on your Echo Show 8 and includes 25 GB of storage with Amazon Photos,” Amazon’s online photo storage offering. Users can continue using the 25GB of Amazon Photos storage after September.
However, users will no longer be able to make photos the indefinite home screen on the Alexa gadget. After September, their devices will no longer have the “photo-forward mode” that Amazon advertised for the Echo Show 8 Photos Edition. The photo-forward mode, per Amazon, let people make “selected personal photos the primary rotating content on the ambient screen” (photos rotated every 30 seconds). Now, Echo Show 8 Photo Editions will work like a regular Echo Show 8 and default to showing ads and promotions after three hours.
“The end of my Echo Show 8”
Amazon never explained why owners of the standard Echo Show 8 couldn’t use PhotosPlus or the photo-forward mode. The devices looked identical. It’s possible that the Photos Edition used extra hardware, but it’s likely that the Photos Edition’s $10 premium was meant to offset the lost ad revenue.
But now people who bought into the Photos Edition could feel like the victims of a bait-and-switch. After paying $10 extra to get a device capable of displaying photos indefinitely instead of ads, they’ll be forced into the same user experience as the cheaper Echo Show 8.
“I really have zero interest in keeping it if it’s going to show ads all day,” Reddit user Misschiff0 said in response to the news. “Sadly, this is the end of my Echo Show 8.”
Other apparent customers have discussed abandoning the Echo line entirely in response to the changes. As Reddit user Raybreezer wrote:
I’m dying for a replacement smart home speaker with a screen that’s not Google. Every day I hate the echo [sic] line more and more.
PhotosPlus was always a tough sell
Amazon may make more money selling ads than it has selling PhotosPlus subscriptions and relevant hardware. It was always somewhat peculiar that PhotosPlus only applied to one Amazon device. Amazon might have been considering extending PhotosPlus to other devices but didn’t get enough interest or money from the venture. Getting people to pay monthly for a feature that some would argue the gadget should already support out of the box seems difficult.
Amazon spokesperson Courtney Ramirez told The Verge that Amazon discontinued the Echo Show 8 Photos Edition in March, noting that Amazon regularly evaluates “products and services based on customer feedback” and that users can still get their Echo Show 8 Photos Editions to show photos.
But it’s hard to overlook Amazon discontinuing a product after about only six months and then bricking the device’s exclusive feature only a year after release. The short-lived Echo Show 8 Photos Edition and PhotosPlus service are joining Amazon’s graveyard of gadgets, which include the discontinued Astro business robot, Just Walk Out, Amazon Glow, Fire Phone, Dash buttons, and the Amazon Smart Oven.
Amazon’s quick discontinuation of the smart display and PhotosPlus is emblematic of its struggles to find a lucrative purpose and significant revenue source for Alexa-powered devices. Reports have claimed that Alexa went without a profit timeline for years and has cost Amazon tens of billions of dollars.
Amazon is banking on the upcoming generative AI version of Alexa being so good that people will pay a subscription fee to use it. But with tough competition, generative AI implementations varying in accuracy and relevance, and some consumers already turned off by consumer gadgets’ AI marketing hype, it’ll be hard for Amazon to turn things around. A premium-priced Alexa device losing its main feature after a year doesn’t instill confidence in future Amazon products either.
The TV business isn’t just about selling TVs anymore. Companies are increasingly seeing viewers, not TV sets, as their most lucrative asset.
Over the past few years, TV makers have seen rising financial success from TV operating systems that can show viewers ads and analyze their responses. Rather than selling as many TVs as possible, brands like LG, Samsung, Roku, and Vizio are increasingly, if not primarily, seeking recurring revenue from already-sold TVs via ad sales and tracking.
How did we get here? And what implications does an ad- and data-obsessed industry have for the future of TVs and the people watching them?
The value of software
Success in the TV industry used to mean selling as many TV sets as possible. But with smart TVs becoming mainstream and hardware margins falling, OEMs have sought new ways to make money. TV OS providers can access a more frequent revenue source at higher margins, which has led to a viewing experience loaded with ads. They can be served from the moment you pick up your remote, which may feature streaming service ads in the form of physical buttons.
Some TV brands already prioritize data collection and the ability to sell ads, and most are trying to boost their appeal to advertisers. Smart TV OSes have become the cash cow of the TV business, with providers generating revenue by licensing the software and through revenue sharing of in-app purchases and subscriptions.
A huge part of TV OS revenue comes from selling ads, including on the OS’s home screen and screensaver and through free, ad-supported streaming television channels. GroupM, the world’s largest media investment company, reported that smart TV ad revenue grew 20 percent from 2023 to 2024 and will grow another 20 percent to reach $46 billion next year. In September 2023, Patrick Horner, practice leader of consumer electronics at analyst Omdia, reported that “each new connected TV platform user generates around $5 per quarter in data and advertising revenue.”
Automatic content recognition (ACR) tech is at the heart of the smart TV ads business. Most TV brands say users can opt out of ACR, but we’ve already seen Vizio take advantage of the feature without user permission. ACR is also sometimes turned on by default, and the off switch is often buried in a settings menu. Including ACR on a TV at all says a lot about a TV maker’s priorities. Most users have almost nothing to gain from ACR and face privacy concerns by sharing information—sometimes in real time—about what they do with their TVs.
At this point, consumers have come to expect ads and tracking on budget TVs from names like Vizio or Roku. But the biggest companies in TV are working on turning their sets into data-prolific billboards, too.
When TVs watch you back, so do corporations
In recent years, we’ve seen companies like LG and Samsung increase their TVs’ ad capabilities as advertisers become more eager to access tracking data from TVs.
LG, for example, started sharing data gathered from its TVs with Nielsen, giving the data and market measurement firm “the largest ACR data footprint in the industry,” according to an October announcement. The deal gives Nielsen streaming and linear TV data from LG TVs and provides firms buying ads on LG TVs with “‘Always On’ streaming measurement and big data from LG Ad Solutions” via Nielsen’s ONE Ads dashboard.
LG, which recently unveiled a goal of evolving its hardware business into an ad-pushing “media and entertainment platform company,” expects there to be 300 million webOS TVs in homes by 2026. That represents a huge data-collection and recurring-revenue opportunity. In September, LG said it would invest 1 trillion KRW (about $737.7 million) through 2028 into its “webOS business,” or the business behind its smart TV OS. The company said updates will include improving webOS’s UI, AI-based recommendations, and search capabilities.
Similarly, Samsung recently updated its ACR tech to track exposure to ads viewed on its TVs via streaming services instead of just from linear TV. Samsung is also trying to make its ACR data more valuable for ad targeting, including through a deal signed in December with analytics firm Experian.
Representatives for LG and Samsung declined to comment to Ars Technica about how much of their respective company’s business is ad sales. But the deals they’ve made with data-collection firms signal big interest in turning their products into lucrative smart TVs. In this case, “smart” isn’t about Internet connectivity but rather how well the TV understands its viewer.
The United Kingdom’s Competition and Markets Authority (CMA) has officially launched a probe into Amazon’s $4 billion partnership with the AI firm Anthropic, as it continues to monitor how the largest tech companies might seize control of AI to further entrench their dominant market positions.
Through the partnership, “Amazon will become Anthropic’s primary cloud provider for certain workloads, including agreements for purchasing computing capacity and non-exclusive commitments to make Anthropic models available on Amazon Bedrock,” the CMA said.
Amazon and Anthropic deny there’s anything wrong with the deal. But because the CMA has seen “some” foundational model (FM) developers “form partnerships with major cloud providers” to “secure access to compute” needed to develop models, the CMA is worried that “incumbent firms” like Amazon “could use control over access to compute to shape FM-related markets in their own interests.”
Due to this potential risk, the CMA said it is “considering” whether Amazon’s partnership with Anthropic “has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets” in the UK.
It’s not clear yet if Amazon’s partnership with Anthropic is problematic, but the CMA confirmed that after a comment period last April, it now has “sufficient information” to kick off this first phase of its merger investigation.
By October 4, this first phase will conclude, after which the CMA may find that the partnership does not qualify as a merger situation, the UK regulator said. Or it may determine that it is a merger situation “but does not raise competition concerns,” clearing Amazon to proceed with the deal.
However, if a merger situation exists, and “it may result in a substantial lessening of competition” in a UK market, the CMA may refer the investigation to the next phase, allowing a panel of independent experts to dig deeper to illuminate potential risks and concerns. If Amazon wants to avoid that deeper probe potentially ordering steep fines, the tech giant would then have the option to offer fixes to “resolve the CMA’s concerns,” the CMA said.
An Amazon spokesperson told Reuters that its “collaboration with Anthropic does not raise any competition concerns or meet the CMA’s own threshold for review.”
“Amazon holds no board seat nor decision-making power at Anthropic, and Anthropic is free to work with any other provider (and indeed has multiple partners),” Amazon’s spokesperson said, defending the deal.
Anthropic’s spokesperson agreed that nothing was amiss, telling Reuters that “our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others. We intend to cooperate with the CMA and provide them with a comprehensive understanding of Amazon’s investment and our commercial collaboration.”
Amazon failed to adequately alert more than 300,000 customers to serious risks—including death and electrocution—that US Consumer Product Safety Commission (CPSC) testing found with more than 400,000 products that third parties sold on its platform.
The CPSC unanimously voted to hold Amazon legally responsible for third-party sellers’ defective products. Now, Amazon must make a CPSC-approved plan to properly recall the dangerous products—including highly flammable children’s pajamas, faulty carbon monoxide detectors, and unsafe hair dryers that could cause electrocution—which the CPSC fears may still be widely used in homes across America.
While Amazon scrambles to devise a plan, the CPSC summarized the ongoing risks to consumers:
If the [products] remain in consumers’ possession, children will continue to wear sleepwear garments that could ignite and result in injury or death; consumers will unwittingly rely on defective [carbon monoxide] detectors that will never alert them to the presence of deadly carbon monoxide in their homes; and consumers will use the hair dryers they purchased, which lack immersion protection, in the bathroom near water, leaving them vulnerable to electrocution.
Instead of recalling the products, which were sold between 2018 and 2021, Amazon sent messages to customers that the CPSC said “downplayed the severity” of hazards.
In these messages—”despite conclusive testing that the products were hazardous” by the CPSC—Amazon only warned customers that the products “may fail” to meet federal safety standards and only “potentially” posed risks of “burn injuries to children,” “electric shock,” or “exposure to potentially dangerous levels of carbon monoxide.”
Typically, a distributor would be required to specifically use the word “recall” in the subject line of these kinds of messages, but Amazon dodged using that language entirely. Instead, Amazon opted to use much less alarming subject lines that said, “Attention: Important safety notice about your past Amazon order” or “Important safety notice about your past Amazon order.”
Amazon then left it up to customers to destroy products and explicitly discouraged them from making returns. The e-commerce giant also gave every affected customer a gift card without requiring proof of destruction or adequately providing public notice or informing customers of actual hazards, as can be required by law to ensure public safety.
Further, Amazon’s messages did not include photos of the defective products, as required by law, and provided no way for customers to respond. The commission found that Amazon “made no effort” to track how many items were destroyed or even do the minimum of monitoring the “number of messages that were opened.”
Amazon still thinks these messages were appropriate remedies, though. An Amazon spokesperson told Ars that Amazon plans to appeal the ruling.
“We are disappointed by the CPSC’s decision,” Amazon’s spokesperson said. “We plan to appeal the decision and look forward to presenting our case in court. When we were initially notified by the CPSC three years ago about potential safety issues with a small number of third-party products at the center of this lawsuit, we swiftly notified customers, instructed them to stop using the products, and refunded them.”
Amazon’s “sidestepped” safety obligations
The CPSC has additional concerns about Amazon’s “insufficient” remedies. It is particularly concerned that anyone who received the products as a gift or bought them on the secondary market likely was not informed of serious known hazards. The CPSC found that Amazon resold faulty hair dryers and carbon monoxide detectors, proving that secondary markets for these products exist.
“Amazon has made no direct attempt to reach consumers who obtained the hazardous products as gifts, hand-me-downs, donations, or on the secondary market,” the CPSC said.
For years, Amazon unsuccessfully tried to argue that it was not required to issue a recall because it was allegedly not legally considered to be a distributor under the Consumer Product Safety Act (CPSA). The commission was not persuaded, however, by Amazon’s argument that it was merely a “logistics provider” for third-party sellers, which would’ve given Amazon safe harbor from product liability under the consumer safety law. Rather than simply providing logistics, however, the CPSC concluded that “Amazon controls the entire sale process.”
“The substantial record before us establishes Amazon’s extensive control over these products, beginning with receipt of a Fulfilled by Amazon participant’s products at an Amazon distribution center, and storage of this inventory until it is purchased by and shipped to a consumer,” the Comission said, concluding that “Amazon cannot sidestep its obligations under the CPSA simply because some portion of its extensive services involves logistics.”
After the CPSC’s testing, Amazon stopped allowing these products to be listed on its platform, but that and other remedies were deemed insufficient. So, over the next two months, to protect the public, Amazon must now make a plan to “provide notice of the product hazards to purchasers and the public” and “incentivize the removal of these hazardous products from consumers’ homes,” the CPSC ordered.
The Amazon business unit that focuses on Alexa-powered gadgets lost $25 billion between 2017 and 2021, The Wall Street Journal (WSJ) reported this week.
Amazon claims it has sold more than 500,000 Alexa devices, which included Echo speakers, Kindle readers, Fire TV sets and streaming devices, and Blink and Ring smart home security cameras. But since debuting, Alexa, like other voice assistants, has struggled to make money. In late 2022, Business Insider reported that Alexa was set to lose $10 billion that year.
WSJ said it got the $25 billion figure from “internal documents” and that it wasn’t able to determine the Devices business’s losses before or after the shared time period.
“No profit timeline”
WSJ’s report claims to offer insight into how Devices was able to bleed so much money for so long.
For one, it seems like the business unit was allowed some wiggle room in terms of financial success in the interest of innovation and the potential for long-term gains. Someone the WSJ described as being “a former longtime Devices executive” said that when Alexa first started, Amazon’s gadgets team “didn’t have a profit timeline” when launching products.
Amazon is known to have sold Echo speakers for cheap or at a loss in the hopes of making money off Alexa later. In 2019, then-Amazon Devices SVP Dave Limp, who exited the company last year, told WSJ: “We don’t have to make money when we sell you the device.” WSJ noted that this strategy has applied to other unspecified Amazon devices, too.
People tend to use Alexa for free services, though, like checking the weather or the time, not making big purchases.
“We worried we’ve hired 10,000 people and we’ve built a smart timer,” an anonymous person that WSJ said is a “former senior employee” said.
An Amazon spokesperson told WSJ that more than half of people with an Echo have shopped with it but wouldn’t provide more specifics. Per “former employees on the Alexa shopping team” that WSJ spoke with, however, the amount of shopping revenue tied to Alexa is insignificant.
In an emailed statement, an Amazon spokesperson told Ars Technica, in part:
Within Devices & Services, we’re focused on the value we create when customers use our services, not just when they buy our devices. Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.
Further hindering Alexa’s revenue are challenges in selling security and other services and the limitation of ad sales because they annoy Alexa users, WSJ reported.
Massive losses also didn’t seem to slow down product development. WSJ claimed the Devices business lost over $5 billion in 2018 yet still spent money developing the Astro consumer robot. That robot has yet to see general availability, while a business version is getting bricked just 10 months after release. Amazon Halo health trackers, which have also been bricked, and Luna game-streaming devices were also developed in 2019, when the hardware unit lost over $6 billion, per WSJ.
Amazon has laid off at least 19,000 workers since 2022, with the Devices division reportedly hit especially hard.
