Amazon and Disney are reportedly mired in a dispute that signals the connected TV (CTV) landscape could grow more contentious as the market continues to fragment and more players vie for a piece of an ad spending pie that last year surpassed $8 billion in the U.S. This isn't necessarily bad news for marketers, who have become accustomed to a just a few players defining the rules of digital.

On Thursday, The Wall Street Journal reported that Amazon's demand to sell a larger portion of the ads that run on Disney streaming apps available via its Fire TV portal, including ABC, ESPN and Disney Channel, was getting pushback. Crucially, Disney is withholding its Disney+ streaming service set to launch next month from Fire TV.

The dust-up, while reportedly cordial — and with optimistic expectations that it will be settled — is an evolution of famously tense cable TV negotiations, where networks and carriers could get into ugly spats over fees and airtime. There are also some key differences, namely in how much bargaining power rests in the media side of the equation.

"Networks have embraced CTV as a way to get control of their inventory back from the operators, and have not been receptive to giving up a portion of inventory unless there is something substantial in return — i.e. data, promotion, etc.," Mike Fisher, head of advanced TV and video at MediaMath, said in emailed comments to Marketing Dive.

In the era of viewer choice and direct-to-consumer services, where people can pursue programming they enjoy wherever its playing — and have proliferating channels to access that content — media companies could have a bigger advantage over tech in the long run, according to Fisher.

"Viewers will always follow content​. If they can't get it on Amazon, they'll find another way," Fisher said.

Not a winner-takes-all market

CTV providers like Fire TV exist in a far more fragmented market than the heyday of cable, which was dominated by just a handful of companies, such as Comcast, that had near-complete control over the devices in a given household. CTV providers also aren't divided geographically, and provide national coverage thanks to the internet.

Amazon's leverage in CTV, though considerable and only growing stronger with the explosion of its ad business and ad tech capabilites, is unlikely to become outsized and will continue to compete with other players like Roku, currently the market leader, sources said.

"There will never be a winner-takes-all market," Tal Chalozin, CTO and co-founder of Innovid, told Marketing Dive of CTV. "From a marketer's standpoint, this is actually very good news. None of [the providers] will be as large as Google was in the search."

More fragmentation creates some complications, but it also prevents the formation of a walled garden ecosystem, meaning marketers have greater ownership of their data, which is not something that's been possible with much of digital advertising.

"On the one side, marketers will need to cobble together a lot of partners, but on the other there is not one entity that just dictates how the industry will shape up," Chalozin said.

Eyes on Amazon

Though it may not become to CTV what Google was to search, Amazon will still be formidable to contend with. Disputes like the one with Disney could become more common as CTV commands a greater volume of dollars, though Fisher doubted they will be as vicious as on cable. More than half of the U.S. population is forecast to watch CTV this year, according to eMarketer, with a deluge of inventory following those eyeballs.

"It all goes down to money at the end of the day," Chalozin said. "At some point when [CTV] becomes a) a big business and b) a super-competitive business, then the stakes are increasing, and hence the negotiations are harder."

In some ways, Amazon's more aggressive approach to bargaining around Fire TV's advertising revenue is just the natural next step as the company continues to lock together more of its products, including Prime Video, e-commerce and advertising.

"It seems like everything was a dress rehearsal to getting to television," Chalozin said. "There's a lot of building blocks that needed to happen until you reach the day where all the pieces are there, and you can open the floodgates and all of the sudden have a massive television business."