APRIL 26, 2013 • Given that Amazon.com already streams a catalog of 150,000 movies and TV shows to its Prime service members owning a PlayStation 3, Wii U, Xbox 360 or Roku device, it comes with little surprise that Bloomberg News is reporting that the online retailer is prepping its own Internet set-top box for release later this year. Amazon representatives have declined to discuss the report. Neither was Bloomberg able to ascertain what business model for monetization the device may employ. The report did detail the set-top box is being developer in Cupertino Calif. by Amazon’s Lab126 division, which has been reported in the past to be experimenting with content for connected TVs.
Impact: Amazon has already experienced a measure of success with its Android-based Kindle e-readers and tablets. The retailer’s hardware does fork Android substantially, basically providing a proprietary user experience. Amazon devices encourage consumers to shop online for products that Amazon delivers. This is accomplished at a low price that mainstream consumers appreciate enough to overlook the obvious mercantile intent of these tablets. We surmise that whatever set-top device that Amazon brings to market will follow a similar model. The retailer might even make them available for free considering that current-generation video game consoles are already channeling Amazon Prime content. There is no denying that Amazon is beefing up its streaming content. Not only has the company secured the exclusive streaming rights to the popular Downton Abbey television series from the U.K., it has also financed a series of TV pilots that are being made available for viewer comments to determine which may be turned into a full series. We doubt that Amazon would be undertaking all of this content activity without a set-top strategy. It also seems likely that the retailer will market its product at a price that consumers will flock to, and that will make existing streaming services nervous. All of which begs a separate question. If Amazon finds itself in a dominant position in the delivery of digital content, book publishing and retailing, as well as package goods sales, how soon before the company finds itself the target of an anti-trust investigation?
