If Amazon is releasing a new device that will be priced between the Fire TV Stick and the Fire TV Box the new Amazon Streaming Product has nothing to do with the Google Chromecast. It is about advancing a proven strategy that Amazon and Roku have used for years now. Flooding the market with multiple devices at multiple price points and creating customers for other services in the process.
New way forward
If a new device rolls out, it would be the first time Amazon would have three streaming products on the market. It would also mark the adoption of a strategy that Roku has employed for years. Roku has been flooding the market with multiple products at various price points since its early days. This has allowed the company to reach a large audience with five products starting at $29.99 for the Roku Express and reaching as much as $129.99 for the Roku Ultra. This means anybody can own a Roku. As the price range increases the performance increases as well. But in the case of Amazon this may not be the case. The hook as far as the new Amazon streaming product goes is that it may deliver 4k HDR video.
At the moment, the Fire TV stick is an immensely popular item (more popular than the Fire TV box). It offers 1080p video and a small form factor with an Alexa powered remote for $39.99. Is there a demand for something more expensive? I’m not so sure. Even more is this technology really going to be exclusive to the new model? Why put buyers in a position to purchase a less expensive model in that delivers superior video performance? I bet it won’t. I think there is a very strong possibility that the new product, if it is going to happen, will be announced with an HDR capable Fire TV box. Otherwise, the new product could affect sales of the Fire TV box on top of the sales of the Fire TV Stick.
Amazon is concerned with not just hardware sales but service sales
If the goal is to encourage more spending with multiple price points the strategy will likely work for the company. It is a matter of putting a store onto a user’s TV. Amazon always offers users a chance to sign up for an Amazon Prime trial. Free trials can easily be forgotten before they are over. In Amazon’s case the free trial is a chance to cash in $100.00 on anyone who buys the item. Think about it. A customer buys a Fire TV Stick, gets the offer of a free month of Amazon Prime with free shipping, movies and tv shows across a variety of devices and access to books etc. All they have to do is not cancel within 30 days and they are charged. Well once they have already paid for a year of free shipping they may as well get that next item on the Christmas shopping list or home needs
Think about it. A customer buys a Fire TV Stick, gets the offer of a free month of Amazon Prime with free shipping, movies and tv shows across a variety of devices and access to books etc. All they have to do is not cancel within 30 days and they are charged. Well once they have already paid for a year of free shipping they may as well get that next item on the Christmas shopping list or home needs list from Amazon. Amazon knows that prime members purchase more from Amazon than non-prime members. There is nothing wrong with this business model, but to ignore the possibility that this is the aim of any new Fire TV product is not seeing the forest for the trees.