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Amazon Heats Up TV Hardware Battle

Mari Silbey
9/28/2017

Not content simply to exploit its advantage with Prime Video, Amazon has released new TV hardware aimed at driving consumers further into its ecosystem of content, distribution and devices. Amazon's new video product is a coaster-size, 4K-compatible Fire TV dongle -- bigger than a stick, smaller than a set-top. It comes paired with an Alexa voice remote and will start shipping October 25 for the retail price of $70.

Why is the new Fire TV a big deal? It offers high-end specs at a relatively low-end cost. The Fire TV renders 4K Ultra HD and high dynamic range (HDR) content, delivers video at 60 frames per second and supports Dolby Atmos audio. It also comes with 802.11ac WiFi and 8GB of on-board storage. Not only does the product undercut the launch of the new $180 4K Apple TV earlier this month, but it also puts more pressure on the cable TV sector, which has been sluggish in bringing 4K set-tops to market. (See Comcast Has a New Timeline After 4K Delay.)

The launch also comes as Amazon.com Inc. (Nasdaq: AMZN) is making a significant content push with plans to invest $4.5 billion in programming this year, and as the company extends its retail channel reach not only online, but through physical locations including Whole Foods stores and Amazon Locker sites. The opportunities to market and sell the new Fire TV are nearly limitless, and once consumers have Amazon hardware in the home, it opens up more ways for the company to engage with customers and continually squeeze out incremental revenue. (See Why Amazon May Be Cable's Biggest Threat.)

The other interesting note about Amazon's strategy is how closely it parallels Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s. First there's the focus on voice control, which has the dual advantage of making search and discovery easier for consumers and of providing more data back to Amazon on user patterns and preferences. (Apple Inc. (Nasdaq: AAPL) and Google (Nasdaq: GOOG) are also following this path via Siri and the Google Assistant, respectively.)

Second, Amazon is pushing the Fire TV and Alexa integration as more than an entertainment experience. The company also highlights how users can control smart home devices like thermostats and connected lights through the Alexa remote, and how customers can play music and view camera feeds through the Fire TV. Like the Comcast X1 platform, the Fire TV supports smart home cameras so users can peek in on different areas of the house (nursery, front door, etc.) without ever leaving the couch. At launch, the Fire TV supports cameras on several name-brand products from companies like Arlo, Ring, Nest and August.


Want to know more about video and TV market trends? Check out our dedicated video services content channel here on Light Reading.


In addition to all of the Fire TV benefits listed above, Amazon also has one more advantage over traditional pay-TV players. The Fire TV is an easy impulse buy and an easy product to pick up as a gift during the holiday shopping season. Cable TV has no equivalent.

The one thing Amazon doesn't offer is broadband service. That means cable and telecom companies can still use Internet access as leverage in the TV market wars. It's a good thing because with Amazon's growing clout, they're going to need it.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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alexalberts
alexalberts
10/8/2017 | 12:27:49 AM
Amazon fire tv and Rokuphen..
Roku doubled down on this strategy this week, unveiling a hardware (and software) refresh that showed it's willing to nearly go toe-to-toe with archrival Amazon.com Inc. (AMZN) on price. In terms of pricing, the Roku Express and Streaming Stick bracket Amazon's Fire TV stick, which goes for $40 and comes with a remote supporting Alexa voice searches. And the Streaming Stick Plus' $70 price matches that of Amazon's new Fire TV dongle -- it supports 4K/HDR video and Dolby Atmos audio. Roku is betting the Ultra's richer hardware feature set will allow it to maintain a $30 premium to the Fire TV dongle. All of Roku and Amazon's devices are priced well below Apple Inc.'s (AAPL) latest Apple TV set-top, which starts at $179. Apple, unlike Roku or Amazon, wants to turn a real profit on streaming hardware sales.
Michelle
Michelle
10/4/2017 | 9:58:37 PM
Re: NFL
So they are saying Amazon made classic rookie mistakes with its broadcast, eh? Old media still has the win for this one!
Phil_Britt
Phil_Britt
10/2/2017 | 2:50:58 PM
Re: NFL
I didn't watch on Amazon, but they were saying the next day on CNBC that Amazon had no "filler (like sportscasters discussing the game so far, etc.) for the unexpected lightning delay. Legacy broadcasters have video or "talent" ready to fill such dead spaces.
Michelle
Michelle
10/2/2017 | 2:28:22 PM
Re: NFL
@Phil Did the Amazon stream end before the game finished?

Related: I wonder how Hulu's realtime sports package stacks up against Amazon's.
Phil_Britt
Phil_Britt
10/2/2017 | 9:08:05 AM
Re: NFL
The Bears-Packers game showed there are still issues to be solved. We started watching game late via DVR, expecting to catch up in the third quarter by fast-forwarding through commercials, time outs and other dead time. Instead, we caught up during the 47-minute lightning delay. The Amazon stream was not prepared for such an unplanned play stoppage.
Michelle
Michelle
9/30/2017 | 11:39:53 PM
Re: NFL
You may be right about that. I think Amazon has been testing live streaming technologies in recent years as well.
Phil_Britt
Phil_Britt
9/28/2017 | 8:19:57 PM
NFL
Amazon's success in this area could depend in no small part on how well its streaming of NFL games performs with fans. NFL Ticket has been a big hit for DirecTV.
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