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Amazon Joins Video Streaming Wars

Alan Breznick

Concluding that it's still better late than never, Amazon has jumped feet first into the burgeoning Internet video streaming market with its own media streaming set-top.

The new $99 compact set-top from Amazon.com Inc. (Nasdaq: AMZN), which is available now from the world's largest online retailer, is taking on similarly equipped and priced media streaming boxes from Apple Inc. (Nasdaq: AAPL) and Roku Inc. in the quickly developing market. It will also compete against such popular HDMI streaming sticks as Google (Nasdaq: GOOG)'s Chromecast, as well as popular game consoles like Microsoft Corp. (Nasdaq: MSFT)'s Xbox lineup.

At a press event in New York unveiling the device on Wednesday, Amazon officials said their new Fire TV set-top offers more than three times the processing power of Apple TV, the Roku 3, and Chromecast. As a comparison chart on the company's website shows, the Fire TV has a quad-core processor and two gigabytes of storage, more than the Apple, Roku, and Google devices. Fire TV also has dual-band, dual-antenna WiFi with MIMO, like the Roku 3 but unlike Apple TV and Chromecast.

In another key differentiating feature, Fire TV offers gaming capabilities through an optional $40 game controller that can also act as a remote control device. In addition, it offers voice search capabilities through a microphone integrated into its remote.

The Fire TV, which takes its name from Amazon's popular line of Kindle Fire tablets, will face an uphill battle in a market dominated by Roku and Apple TV so far, with the Chromecast streaming stick coming on strong since its launch last fall. Roku, the early market leader, reports that it has already sold more than 8 million media streaming set-tops and has earned rave reviews for its latest box, the Roku 3. Most recently, Roku also introduced its own HDMI streaming stick to counter the Google entry. (See Roku Sticks It to Google and Chromecast's App Revolution.)

But Amazon officials said Fire TV will make up for any lost ground in the media streaming market by delivering faster performance, a better user and search interface, and an open environment. It will offer plenty of content, thanks to its own Amazon Instant Video library of more than 200,000 movies and TV shows and content licensing deals with such online video powers and major content providers as Netflix Inc. (Nasdaq: NFLX), Hulu LLC , Walt Disney Co. (NYSE: DIS), and Major League Baseball.

The media streamer launch by Amazon comes as the online retailer is already making strong gains in the Internet video market. In a ranking compiled by Qwilt Inc. , for example, the Amazon Instant Video site jumped from fifth most popular web video site to third most popular site between March 2013 and March 2014, leapfrogging over the Apple and Hulu sites. Only the Netflix and YouTube Inc. sites ranked higher.

Qwilt executives, who track Internet video traffic flows, said Amazon Instant Video's traffic volume has surged 94% in the past year, thanks in large part to the success of the Kindle Fire tablets. They see Amazon continuing to score gains as it rolls out the Fire TV devices and pumps out more original content. "The data is pretty indisputable," says Dan Sahar, co-founder and VP of product marketing for Qwilt.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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User Rank: Light Sabre
4/8/2014 | 10:34:18 AM
Re: Curious to see reviews...
Balkanization of content is now getting into full swing. With so many content providers and middlemen looking for money, be prepared to have multiple service subscriptions if you really must have access to certain content.
User Rank: Blogger
4/8/2014 | 10:12:44 AM
Re: Curious to see reviews...
So for now, msybe it does boil down to how much of an Amazon fan you are, or how badly you want to use voice search. The most significant weakness I see after looking at Fire TV a little more closely is that it doesn't offer HBO Go, probably a deal-killer to Game of Thrones fans, right? (or maybe a deal-decapitator, to go with the GoT theme?) Looks like Roku 3 and Apple TV both have HBO Go, and Roku also has Amazon video.
User Rank: Light Sabre
4/7/2014 | 2:43:35 PM
Re: Curious to see reviews...
Amazon Instant Video is kind of just a supplemental part of Prime, but I think it was a really smart way to start the service. There isn't a ton of selection yet, but I expect that to change over time. 

Because of Amazon's economies of scale this was something that became inevitable. The company started in content with books and just naturally branched out. What's next? A Steam alternative?
Mitch Wagner
Mitch Wagner,
User Rank: Lightning
4/4/2014 | 7:03:57 PM
Re: Isn't it a bit of a waste of time?
I'm not seeing anything significant here that the Roku and Apple TV can't do. Amazon doesn't have any competitive advantage on capabilities. 

Like TaraSeals, I see the greenfield consumer as the target here, someone who's attracted by the Amazon brand. In a growing market, Amazon can do well by simply making a me-too offering. 
sam masud
sam masud,
User Rank: Light Sabre
4/4/2014 | 2:18:50 PM
Re: Curious to see reviews...

Have you heard anything about Amazon delivering the box via drones?
User Rank: Blogger
4/3/2014 | 9:24:25 PM
Re: Curious to see reviews...
Haven't looked into this offering too deeply yet, but I agree with Tara. Much like people who already have an iPad wouldn't be likely to try the Kindle Fire, i don't think anyone with the Roku 3 would try Fire TV.
User Rank: Blogger
4/3/2014 | 9:02:52 PM
Re: Curious to see reviews...
Yeah, me too, Karl. In fact, we almost bought a Roku 3 a bit earlier too. Now we'll wait to see if Fire TV lives up to its promise. It may be, as our other early commenter says, that Amazon's real target audience is the vast bulk of us who haven't bought a media streamer yet, not the ones like you who already have a Roku, Apple TV or Chromecast. This sgould prove most interesting. 
User Rank: Light Sabre
4/3/2014 | 5:10:13 PM
Isn't it a bit of a waste of time?
I can't help but see this as a ho-hum entry. I mean, sure, it outspecs the competition, but outside of the truly technical types like ourselves, will anyone care about the MIMO, for instance? I think the content proposition needs to be spot on and it's just sort of me-too--it's all fare we can access in other ways. 

The gaming aspect is kind of interesting--the inclusion of Minecraft could be a differentiator for parents who haven't already gotten their kids an Xbox, Wii or PS3/4. But here too-- this is content anyone can get elsewhere on other platforms (inlcuding online or via mobile app).

So perhaps Amazon is angling for that greenfield consumer-- the person who doesn't have a connected anything else.

And if people are just looking for a way to get OTT content on the living room screen, Amazon has an uphill battle. Apple TV has an advantage in terms of the fact that it fits nicely into Applehead families-- the integrated walled garden ecosystem basically begs those who already have Macs, iPads and iPhones to go that direction for streaming to the TV. And then Chromecast has it made because it's really cheap and offers all kinds of app integrations. Roku 3 meanwhile has been working on a channels strategy that's fairly compelling. What does Fire TV have that will send it sailing past all of these ships in a congested river of competition?

Call me a Debbie Downer but I would rather have seen Amazon invest the R&D dollars it spent into evolving its content strategy. Let others deal with the hardware game. 


User Rank: Light Sabre
4/3/2014 | 1:01:32 PM
Curious to see reviews...
Everything looks promising and the stats look great. Unfortunately I just bought a Roku 3 that I'm very happy with. Curious what people over time state will be the benefits over the Roku ecosystem (outside of more powerful hardware)?

Lots of promises were made that Amazon's going to offer a more open ecosystem than their competitors; I also wonder what that's going to look like in implementation?
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