Like the Fire Phone, Amazon’s Fire TV Stick May Be Too Little, Too Late


Fire TV Stick

Fire TV Stick Amazon



Amazon just unveiled its Fire TV Stick, a device that plugs into the back of a television, letting people tap the internet for shows, movies, and other content from Amazon’s own Prime Instant Video service as well as competing services like NetFlix and Hulu.


The stick will cost just $39, cheaper than Roku’s $49.99 stick, and it will offer twice the memory of Google Chromecast, which is a bestseller on Amazon. For those who subscribe to Amazon Prime—the company’s two-day delivery offering that also includes all-you-can-eat Prime Video—the stick will cost just $19. And yet, what’s most noteworthy about the Amazon Fire TV stick is not its low cost or its capabilities, but its timing.


The market for “over-the-top” internet streaming devices is already crowded with competitors like Roku, Google, Apple, and even Amazon’s own $99 Fire TV settop box, which it released earlier this year. But competition alone is not the problem. Even the most crowded markets tend to have room for a high-quality, low-cost competitor. The real problem here is that many believe the entire over-the-top market is on its way out. As consumers become more and more aware of smart TVs, they’ll no longer require devices like the Fire TV or the Fire TV Stick to watch Netflix on their televisions. Smart TVs will have all those capabilities baked right in.


“I don’t think the makers of these over-the-top devices realize they’re a transitional technology and that the sun is setting on the need for these devices,” says Jim Nail, a Forrester analyst specializing in online video.


Nail says his research shows that consumers are beginning to wake up to the fact that there are television sets out there that can already do the job of these other devices. As a result, their appetite for plugging even more devices into that television is waning. “Consumers are starting to understand smart TVs well enough that smart TVs are going to the top of the list of the way they want to access over-the-top content,” he says.


Some manufacturers of these devices are even beginning to catch on. Earlier this year, Roku, an early leader in this industry, announced that it would be releasing its own line of Roku TVs. The device, itself, is made by global manufacturers TCL and Hisense, but Roku is essentially the operating system. In a blog post back in January, Roku founder Anthony Wood wrote that the goal of the new TVs was to “remove all of the complicated layers and menus, and unnecessary features and settings,” involved in the smart TV space. In other words, the goal is to simplify.


All this makes Amazon look a little late to the party. And yet, that doesn’t mean the Fire TV Stick will be a total failure from Amazon’s perspective. In the short-term, in fact, it may do quite well. At such a low price point, it’s an easier purchase decision for consumers who might not be ready for (or aware of) smart TVs. That could hasten the consumer transition to streaming video, which, of course, would be in Amazon’s best interest, because it means Amazon could then sell them more content.


That is usually Amazon’s end game. Whether we’re talking about the Fire Phone or the Kindle, Amazon’s main purpose for selling hardware is almost always to use it as a platform to sell more stuff on Amazon. In that way, Nail says, you could think of the Fire TV Stick as a “loss leader,” one that might even stand a chance of achieving some commercial popularity—however fleeting that may be.



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