Is Amazon Building a Kindle Set-Top Box?
February 10th, 2012 by Jeremy Toeman
I'm awesome at photoshop! I hope it doesn't look like this!
I’m pretty sure the headline here says it all. Let’s review the facts (it might be worth re-reading my bit on why HBO doesn’t go direct to consumers, as many of those issues are addressed here):
- Amazon has a large content library. They are actively increasing it.
- Amazon has a content distribution platform already capable of streaming to non-PC devices.
- Amazon has a recurring billing relationship with consumers.
- Amazon has a (phenomenal) marketing and distribution channel for getting devices into consumers houses.
- Amazon has a strong brand in the hardware space.
- Amazon has the customer service & support infrastructure needed to deal with service issues.
- Amazon has the ability to build hardware and deal with supply chain issues.
- The TV services industry is huge, and Amazon wants in.
Even if they don’t plan to decouple content from Amazon Prime, making a box is a very viable, and, in my opinion, a likely move. In addition to all of the above, it is a strong move versus Apple (and possibly Google and Microsoft too).
A $99 Amazon Kindle TV box would not surprise me this coming holiday season (how about a September launch, right in time for school?). But then again, I occasionally get Kindle predictions wrong.
Kinda saw this one coming, didn't ya?
Oh, and one more thing. What if they do it by acquiring Roku? Let’s review that scenario:
- Roku already has something better than a minimum viable product.
- Amazon could skip all the work on developing a new UI/UX (regardless of your feelings on the Roku UX, it is well more than functional).
- Roku isn’t a sustainable business yet, enabling Amazon to purchase at a reasonable price.
- Roku has a team with a strong background and industry knowledge relevant to the TV/Device space.
- Amazon can distribute the same hardware at the same price point (which seems to fall in the not-too-profitably category), yet supplement with reliable recurring revenue.
- Amazon wouldn’t have to drop the Netflix service, but could slowly chip away at it from within.
- It’s cheaper than trying to buy Xbox from Microsoft (though that’d be quite the coup, plus nobody would even need to relocate)
I don’t really think Amazon *needs* to buy Roku, but it would probably let them fast-track a bunch of steps. And then it could be a $49 Kindle TV, which just sounds so… right.
February 13th, 2012 at 1:04 pm
Why would amzn buy a decaying business like roku when the path to their ambition is to be integrated in all consumer devices like TVs, BDPs and game consoles?
February 18th, 2012 at 5:59 am
[...] Fortunately, it’s not all doom and gloom. Updated Netflix and YouTube apps are coming to the Premiere platform later this year. Additionally, TiVo looks to be opening up a new SDK - perhaps taking more of an Apple or Roku app store approach. Combined with Blockbuster’s departure, I’d hope this would be enough to encourage Amazon to refresh their archaic TiVo presence, which lacks Prime Instant Streaming… unless, that is, they’re dedicating resources to a Kindle set-top box. [...]
February 20th, 2012 at 12:50 pm
A set top box might be a good interim route. If the industry does indeed go the route of having to purchase a TV with a particular service built it, a successful set top box could help build more consumer awareness. The box would be introduced with all the marketing fan fare and perhaps build a loyal fan base that could eventually commit exclusively to an Amazon TV set purchase.
I see all the absolutely valid points Jeremy makes in this article. For some reason though, I (personally) still don’t see Amazon as a TV/Movie content provider. I know I am wrong here…it has been providing content for years now; but I still see Amazon as books, music and misc shopping. For some reason, when it comes to downloading/streaming TV and Movies – let alone purchasing hardware and committing to them exclusively – Amazon is not a brand that is on my shopping list.