Hiring Patterns Beginning to Match Up
Not just Speculation
Amazon may be looking at joining the set top device market. Whether it is the name of a new product or service Internet retailer recently patented the name Fire Tube . The company has also made a number of moves in the past year indicating something big on the horizon. This should come as no surprise as it is a natural follow up to news in 2012 when Amazon began recruiting for development of a new product . The statement contained this very telling passage.
“We are working on a new revolutionary V1 product that will allow us to deliver Digital Media to our customers in new ways and disrupt the current marketplace. We believe this new product will be even bigger than Kindle.”
Could the spate of game developer hires and other murmurs be linked to this patent? When this information is coupled with reports that Intel is reaching out to Amazon as a partner for its proposed internet based television service it appears that something significant is about to happen.
Will Amazon debut a new product this year? There is no telling if an Amazon based streaming box will be unleashed this fall but when the company does jump in to the market it will be at the right time to make the biggest splash. It will be ready to ship out quickly to its base of Amazon Prime customers. It will be the first real game changer in the market. The product will get major press and Amazon is unlikely to make the same mistake as Google did with its sloppy roll out of the Chromecast. Right now the number one selling (DMR) AKA streaming device on the market is Apple’s Apple TV. There has to this point been more than 12 million sold. Roku, its closest rival in the category, has sold over 5 million units and is aggressively expanding into Europe. Google has entered the fray with it dongle device the Google Chromecast as well as a number of products that run the Google TV platform. But a sleeping giant is about to awaken. And when it emerges the whole market may be in for a major shakeup. The reasons for this are numerous.
Unique Force in the Marketplace
Amazon has a very different way of making money than other tech companies, media distributors, or retailers. This is because of its unique position as a retailer that produces high end media products that in turn encourages its customers to purchase completely unrelated products. Most technology based companies make money from the sales of their physical products, units sold. For instance Samsung makes money based on selling cell phones to carriers, branded TV’s, blue-ray players and the like. Retailers on the other hand make money when people come walking in to their stores and walk out with products. For stores like Best Buy that means that they profit by selling Amazon’s Kindle Fire tablets and its E-Readers. But on the other hand as Jeff Bezos was recently quoted during his announcement for the newest Kindle Fires saying, “We want to make money when people use our devices, not when they buy our devices,”
What does he mean by that?
Amazon makes money every time someone buys a 99 cent app for the Kindle Fire. Amazon makes money each time someone at a coffee shop killing time buys an episode of a recently aired show from Amazon Video on demand. Amazon is no different than Apple in that regard. Its iTunes Store and App Store are set up in a similar way. But Amazon can create capitol in a completely different way. By encouraging customers to utilize Amazon Prime. On the surface, Amazon Prime membership appears to be a service that saves its subscribers money by providing free shipping, use of the free lending library for its E-books as well as access to a large library of television shows and movies along with its coming original content. This means that when Christmas rolls around and all of the Big Box retailers are advertising the Kindle Fire and E-Readers to entice customers to come early on Black Friday what they are doing is inviting customers to buy everything else for the holiday season from someone else. The company always gives away a free month of Prime membership with the Kindle Fire. So now if someone needs new cords for that TV from Target the hardware can be purchased right from Amazon with free shipping. What is the hot toy this year? One click buying means that you can have it at your home packaged and ready to go in two days. Would you like to fight traffic at the mall instead? The Prime program is like an incentive card that you need never have a key chain addition for. And its tablets are a mobile store that you can access anywhere that you reach the Internet. On top of that Amazon does have an incentive based credit card program with its Amazon branded Visa card. The card earns costumers points that can be used to purchase products from….Amazon of course. This is a company with not only its own ecosystem but its own gravity. Its sales strategy is so disruptive to traditional big box stores that some have stopped carrying the Kindle Fire.
What to Expect while we are Anticipating
When it gets in to the DMR game it is going to have a very well thought out strategy and it will be set up to make a profit. There will certainly be a way to shop for everything Amazon sells. Expect integrated video reviews of many of the top selling products on the site right at your fingertips. Expect to be able to listen to Amazon’s audio books with on screen X-Ray integration. Movies and TV shows from Amazon Instant will be an obvious feature and users should expect IMDB integration along with it in the least. The company has a new feature which allows those using Amazon Instant Video service to find info about music in a given movie and of course purchase it. This will certainly be a feature in the new device.
Performance and Hardware
It will likely be a high performing device with a top of the line processor that puts most others to shame. If the hardware of the Kindle Fire HDX is any indication then whatever is the top of the line processor used in the set top platform at that point will be matched or exceeded by Amazon. The company has advanced metrics on what the public is looking for in set top devices and a library of reviews on all of the devices on the market whether they have a Google TV format, Apple TV, Roku and even the Android based machines. While they will definitely do their due diligence on customer needs the public has already told Amazon what they like and dislike about all of their potential competitors.
Amazon may even find a way to integrate Android gaming. Multiple reports including USA Today have said that Amazon will be selling a dedicated game console but I have a feeling that the game info is being floated because it is going to be integrated with a streamer. The OUYA valiantly tried to open this market as an Android gaming console but it has yet to catch on. Why would Amazon try and integrate games into its streaming device? Because it will be another revenue stream and reports indicate that the device will come with a dedicated controller. But if the system happens to allow console emulators or advanced games a second controller with more options than what is included might be nice. I wonder if there is anywhere to order one? See how this works?
Third Party Integration?
It will have the sorts of capabilities Roku Customers and maybe even Apple customers have always hoped for. Expect it to integrate seamlessly with the Kindle Fire in a similar fashion to how Apple products integrate with the Apple TV. It should be seen as a major shot across the bow that the new kindle Fire is Miracast capable. Expect Miracast integration not to be limited to the Kindle Fire but there will likely be features that are only fully accessible with its products just as an added incentive to purchase their own hardware. Expect the device to integrate Discovery And Launch Protocol (DIAL) which is the same technology used in the Google Chromecast and soon the Roku. This is the protocol that allows tablets and cell phones to seamlessly “Cast” Netflix and YouTube via the Chromecast. This kind of integration will benefit Amazon if its competitor, Google pulls the same game with Amazon as it has with Roku, basically barring its competition from using YouTube, the most recognized source for streaming content in the world. I would expect that Amazon will also have numerous partnerships with companies to allow for multiple video apps.
The kindle Fire is sold at most at a break-even price and you should expect any streaming device to be sold the same way. This is done so that people can easily be pulled into that sales vortex. Right now regardless of the quality of the competition various versions of the Kindle Fire make up 12 of the top 20 sellers on Amazon, though you can be sure that will change when the new iPads debut. Apple, the worldwide leader in tablet sales occupies 3 of the top 20 spots, likely because so many apple customers buy their products from other sources including Apple Stores, numerous retail locations and their own website.
Who What Where When
We can already answer who. What Where and when still remains a speculation game. What can be said with near certainty though is that an Amazon streaming product whether it is a dongle like the Chromecast or a set top box like the Roku product line and Apple TV will likely be a compelling and dynamic addition to the marketplace. The Streaming Advisor will keep a close watch on this story as it continues to develop.
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