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.
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.