Are you ready for Firetube? Rumors are swirling, and many signs are pointing to Amazon releasing a streaming set-top video device this holiday season to tackle competitors such as Google’s ChromeCast and Apple TV. Sure to compliment its Amazon Prime video service as well as its recently announced Kindle Fire HDX tablet line, Firetube (rumored name) could make for an enticingly disruptive product. It’s late to the game, so how will it win?
First, let's look at the competition. Google’s ChromeCast is out of the gates and has had some initial interest, but considering Google’s stumbles in this space, its long-term success is questionable. Years of promoting Google TV fizzled, as manufacturers like Logitech in the end decided to discontinue branded items with the Google TV OS. It looks like Google TV as a brand is being phased out, as even Sony is starting to veer away. Sony is most notable because it has stuck by its Google TV guns, releasing new generations of the product with very little success. Last month, it launched the Bravia TV stick. No, it’s not a new type of chewing gum, but rather a very ChromeCast-like thumb drive-size HDMI plug-in device. What is notable is that even though the Google TV engine is reportedly driving it, no mention of Google TV is anywhere in the advertising of it. Perhaps as the Windows name is being phased out of Microsoft’s Surface marketing more, due to perhaps some emotional technical baggage, Google TV is also being played down to signal a new start.
What is the new start? Many manufacturers are using the technology in new products, from LG to STMicroelectronics to Sony, but none are using the typical Google TV branding. Developer conferences are starting to use the phrase “Android TV” more often, so it's a good bet that if it's starting at the official SDK level, it may eventually seep into the official branding. Most of Google TV’s hurdles have been centered around usability. There is a reason you often seen returned/marked down Sony Google TV boxes at places like Best Buy. Consumers want something that is easy to set up and use, and Google TV may not currently fit in that category.
I know first-hand, in my studio I have a Sony TV with Google TV build-in. I got it a year ago because I wanted to have a built-in web browser in the TV for development and presentations. I have to say it’s one of the most clunky and unintuitive devices I have, with a crazy remote, not to mention the constant crashes and sudden reboots. Until you have a TV that crashes and reboots, you never really fully understand frustration.
Aside from Android, Google has had a pretty poor track record with products. Its Nexus tablets and Android software are popular, but they do have a tendency to sunset and discontinue products and services whenever the whim strikes them. Their business model centers on privacy erosion to gain more insight into your interests so they can serve you ads, bluntly speaking, a concept that has worked very well for them via online intuitives like Google + and search. However, TV is a tougher nut to crack. I could easily see them getting bored with the whole thing in a year or two. Google TV or Android TV or whatever they will call it has yet to take off, and it does not seem like it will be entrancing the masses this holiday season.
Apple TV is currently the leading seller of streaming entertainment boxes, so if Amazon has anyone in its sights, it would be Apple. Apple TV is a premium user experience with a wealth of content from the iTunes store, but it is also a pretty closed ecosystem with only a handful of channels available on the actual unit. They have made some progress recently with some new channels from partners such as Vevo and Disney, but still it’s only a handful; consumers are hoping they are working on more for a larger re-launch. There are also rumors they may too be looking to launch an update to Apple TV this holiday season, maybe to be announced this month, but we’ll have to see.
Advantages
Amazon’s Firetube streaming box could bring with it a number of hard to deny advantages, and these are all worth considering, because even though the company is late to the game, it still can come up from behind fast. Here are five of the most compelling advantages:
1. Amazon does not need to make money (at first). Amazon has no shame in not making a profit on devices, or selling at cost, if it gains long-term customers. Amazon’s target is clearly getting people into its ecosystems, and it would not be surprising if it offered the streaming box at a lower price than Apple TV. If Apple TV is $99, then Amazon could go $79 or even $49. A few years back, analysts concluded that the parts to making an Apple TV unit amounted to $64. Amazon could skew closer to that amount without batting an eyelash. It could also benefit from the Kindle HDX’s refined interface. Much of the groundwork for a user interface has already been developed on the Kindle tablets, and it actually is pretty slick. It would not take much to move it over to a set-top device.
2. Amazon Prime is ready to go. Amazon already has a built-in video store, music store and app store, but what really will sell it is what Apple does not have: Amazon Prime Instant Video. Members of Amazon Prime can stream thousands of movies and TV shows free with the service, just like Netflix. If you are a prime member, your Netflix-like experience will be available right out of the box. Apple TV is single-purchase items, whereas Amazon is all you can eat, er, I mean stream. Instant Video will be the Firetube’s killer feature.
3. The App Store can be more open. Apple may be thinking about having an app store on Apple TV. In fact, it already has SDK software in place for developing video apps. Recent examples include Vevo and Hulu, where the streaming companies worked with Apple’s development tools to create their own video app for Apple TV. The issue is that Apple is working with a minimal selection of big players, such as Hulu. Amazon could open the floodgates. Allow any company to create a video app (perhaps with its Fire OS operating system), and submit it for inclusion on the Firetube box. Quality control and user interface consistency could go out the window, but no matter, Amazon could have dozens or hundreds of channels available at launch or in the coming months.
4. Front page selling will happen. (Oh, yes it will.) Apple is a little shy publicly about its Apple TV “hobby.” It takes a little digging to even find it on its website. Amazon will have no qualms about cementing it on the front page of Amazon.com for a year. Like the relentless Kindle promoting, The Amazon Firetube will be heavily marketed. Indeed, there will be no escape — at least if you use Amazon.com, and I am betting you do.
5. There are no partner conflicts. Amazon’s video store won’t be appearing on Apple TV, nor will Google’s Play store; Apple would never eat into its own revenue by adding in a competitor's too-similar store experience. Amazon is mostly centered on variety of the user experience, and historically is less clamped down when it comes to competing apps or services that could conflict with its own. As it has demonstrated with the Kindle tablets, there is room for everyone to have a slice of the pie, so the Kindle Firetube may seem more open with more variety as opposed to Apple’s limited offerings on Apple TV.
With all the pluses Amazon has in tackling Apple TV and to a lesser extend Android TV, there is still one very large elephant in the room. Amazon almost always releases bad first versions of hardware. Now granted, with the Kindle e-book devices and Kindle tablets, these were new-ish markets, and Amazon was not as refined with things such as usability. The streaming box industry is fairly mature, and Amazon already has the content, Fire OS, user interface roadmap and several years of mistakes to take them into a winning circle. With the refined Kindle ebook reader and Kindle HDX experiences, it would be sort of surprising for Amazon to release a clunky, hard to use Google TV-like box. But anything can happen.
Chances are Amazon will learn from its mistakes, but more importantly from its successes, and launch a streaming TV box that is truly ready for primetime. It also has the hooks to tie it into mobile, making it work with sending video to and from its Kindle tablets. All in all, the Kindle Firetube could quickly be a very hot item this holiday season, one that Google and Apple may need to take immediate notice of.
