(Bloomberg) -- When Walt Disney Co. launched its new streaming service last week, it had a key partner: Amazon.com Inc.
Many consumers connected to Disney+ through the tech giant’s Fire TV digital media players. And Amazon Web Services helped deliver Disney’s movies and TV shows to viewers through its cloud-computing network.
But Amazon is also Disney’s streaming competitor -- one of many so-called frenemies in the burgeoning market for online TV.
Media and tech companies have forged uneasy alliances as they cope with one of the biggest shifts in the history of entertainment. Delivering shows and movies to consumers online has required a new level of teamwork between Hollywood and Silicon Valley, and it doesn’t always go smoothly.
Disney took months to get most of the major media-device companies to agree to carry its new streaming service, a key step to ensuring that Disney+ was widely available. Amazon was among the very last platforms to sign on, with the announcement coming just days before the launch last week.
“The fact that you’re in multiple lines of business together is problematic,” said Sandy Jap, a professor at Emory University’s business school and author of “Partnering with the Frenemy,” a book about managing corporate relationships. Half of such partnerships end up not working out, she said.
In the past, a company like Disney relied largely on third parties to distribute its content, whether it was cable TV providers or movie-theater chains. Now, it has to build new relationships -- and they can be delicate.
Apple Inc. introduced its subscription TV product with a big promotional push on Nov. 1. It also distributes services such as Disney+ and Netflix through its app store and digital media players.
The conflicts affect where shows air and where services are advertised. Netflix Inc. stopped producing new episodes of Disney’s Marvel shows, such as “Jessica Jones” and “Luke Cage,” after Disney declined to renew a deal to sell its movies to the service. Last month, news broke that Disney wasn’t allowing ads for Netflix to run on its ABC network.
The rivalries are even mixing up the seats on company boards. Facebook Inc.’s Sheryl Sandberg and Twitter Inc.’s Jack Dorsey stepped down from the Disney board last year after their companies began competing for sports streaming rights with Disney’s ESPN. This year, it was Disney Chief Executive Officer Bob Iger’s turn to leave the Apple board on the eve of Apple TV+’s launch.
Things could get more complicated if the U.S. Justice Department is successful in terminating a 70-year-old antitrust settlement that barred Hollywood studios from owning theaters. It could lead to media companies snatching up theater chains, though it’s hard to tell if they’d want to do so in the streaming era.
The frenemy problem isn’t entirely new, of course. Amazon began as a seller of books -- and is still the publishing industry’s biggest outlet in the U.S. -- but the e-commerce giant has knocked heads with companies on topics ranging from pricing and e-books to selling used copies.
Amazon and Microsoft Corp. have teamed up in areas like digital assistants, and the Amazon Web Services unit is a big seller of Microsoft Windows Server products. But the two are fierce competitors in cloud computing. Netflix, the largest paid streaming platform, also is a heavy user of Amazon Web Services.
The tug of war will likely get more intense next year. AT&T Inc. is looking to get cable operators such as Comcast Corp. to embrace its new HBO Max streaming service, while Comcast is introducing its competing Peacock product.
The industry’s tangled ties have been especially hard to ignore at Disney Streaming Services, the technology arm of the entertainment giant.
When Disney acquired a majority stake in the business, then called BamTech, in 2017, the company helped distribute online video for customers such as HBO and World Wrestling Entertainment Inc. Both have since found other ways to distribute their products.
Last year, Google, which owns YouTube, bought New York’s Chelsea Market building, home to Disney Streaming Services. That could lead to a frenemy breakup of sorts.
Michael Paull, who runs that business for Disney, said he expects to get kicked out when its lease is up.
To contact the reporters on this story: Christopher Palmeri in Los Angeles at email@example.com;Matt Day in Seattle at firstname.lastname@example.org
To contact the editors responsible for this story: Nick Turner at email@example.com, Rob Golum
©2019 Bloomberg L.P.