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Amazon Joins Video Streaming Wars

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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