Report: Amazon Developing Box to Stream Video to TVs. One Big Question: Why Does Amazon Want to Enter a Crowded Field That Will Only Get More Crowded

Apr 24, 2013  •  Post A Comment

Amazon, "the e-commerce giant, is planning to introduce a device this fall dedicated to streaming video over the Internet and into its customers’ living rooms, according to three people familiar with the project who aren’t authorized to discuss it," reports Bloomberg Businessweek.

The Bloomberg story notes that "The Amazon set-top box will compete with similar products, such as the Roku, Apple TV, and the Boxee Cloud DVR, along with more versatile devices such as the Playstation 3 and the Xbox."

Most of the other boxes also offer access to Amazon’s video services, as do a number of new smart TVs.

So why is Amazon interested in this particular TV hardware?

The New York Times follow-up quoted an analyst who speculated on Amazon’s motives, "Michael Pachter, an analyst at Wedbush Securities, said one approach that could make sense was for Amazon to sell the device for $100 or less, about what Internet set-top boxes cost today, and to include a free year of its subscription video service.

"At the end of the term, customers would have an incentive to sign up for Amazon Prime to continue receiving all of its membership benefits, including the video service. ‘I think this is a Trojan horse to get people to join Prime,’ Mr. Pachter said."

The Times story notes that Amazon’s "Prime Instant Video, a Netflix-like subscription video service with more than 40,000 movies and television episodes is included as part of Amazon’s broader Prime membership. Among other benefits, Prime members, who pay $79 a year, get free two-day shipping on orders bought through Amazon’s site."

CNET, in its follow-up to the Bloomberg story posed seven questions it has about an Amazon hardware TV device for streaming:

1) Will it offer an app store with non-Amazon content?
2. Will it have games?
3. Will it do music too?
4. Will it mirror or stream content from Amazon’s Kindle Fire tablets or other devices?
5. Will it be any better than Ruku?
6. Will it even be a box?
7. How much will it cost?

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