Report: Amazon cuts Dataxu's access to Fire TV inventory

Dive Brief:

Amazon is removing demand-side platform Dataxu from its Fire TV third-party DSP service, according to a report in AdExchanger citing sources familiar with the matter.
As a result, Amazon Fire TV ad inventory is only available to two programmatic buying platforms: Amazon DSP and The Trade Desk. Amazon did not respond to AdExchanger's request for comment, leaving it unclear whether other DSPs will be able to access the inventory.
The news arrives after Roku acquired Dataxu earlier this fall. That acquisition came several months after Amazon opened its Fire TV ad inventory to third-party DSPs.

Dive Insight:

Amazon and Roku are big players in the U.S. streaming media market, with each making moves to grab a larger share of what is expected to be a growing space as more consumers cut the cord with broadcast TV and switch to internet-driven options like streaming media players and connected TVs. In this light, it is little surprise that Amazon is countering Roku's acquisition of Dataxu by shutting off access to Fire TV's ad inventory.

When Amazon decided to open more Fire TV inventory to outside programmatic buying platforms, it was hailed by industry experts as a move toward creating a more open internet. But now that Amazon is shutting off one of the two firms that were originally part of the strategy, Amazon's approach is looking more like the traditional walled garden strategy embraced by other large digital media platforms.

Roku's $150 million purchase of Dataxu will give the company the tools to help build its offerings for advertisers, who are looking to get in front of Roku's 30.5 million active users and could give Roku a way to further shore up its important role in streaming media by making it easier to monetize through advertising.

Competition between Roku and Amazon has increased as adoption of both streaming media players and smart TVs grows. Roku owns 39% of the streaming media player market in the U.S. and Fire TV devices make up 30%, but Amazon's growth is outpacing Roku, according to an nScreen Media report citing research from Parks Associates. Roku also became the largest shipper of connected TVs in the U.S. this year for the first time.

Meanwhile, OTT ad spend is ballooning, rising 38% in 2019 to $6.94 billion, eMarketer found. The report predicts connected TV usage will grow 5.3% to 195.1 million viewers by the end of 2019 and will pass 200 million by next year.

As Roku and Amazon duke it out, other players are also moving to establish a larger ad business to get in front of cord-cutters. TV maker Vizio recently created an in-house advertising unit to sell ad space for its SmartCast connected TV platform, commercial slots on Vizio's WatchFree streaming service and units on partner OTT apps.

As land grabs continue in this arena, Amazon's move to cut Dataxu's access shows it remains a fierce competitor in what is likely to be a contentious space in 2020. Amazon also recently wound up in a tug of war with Disney, with the latter withholding its Disney+ streaming service from Fire TV as the former demanded to sell a larger portion of the ads that run on Disney streaming apps available via Fire TV.