Thursday, April 03, 2014

Amazon's Fire TV Box: No-brainer strategy, but will it light up retailer's revenue?

But Fire TV isn't just a device: Amazon wants to make buying stuff through the TV one-click simple. Fire TV comes preloaded with a customer's Amazon account information. It's offering Netflix and Hulu Plus, because it has to in order to gain traction, but the aim is to make Prime Instant Video the easiest-to-use SVOD service on the box -- again, to encourage Prime memberships. Here's why: In the U.S., Prime users spend around $1,500 per year on merchandise, compared with $500 for non-Prime users, according to Bernstein Research estimates.

Amazon wants to have the best-in-class Internet-video device in a crowded category. The real money, however, isn't in consumer electronics but in providing a portal to the broader e-commerce catalog, said John Barrett, director of consumer analytics at Parks Associates.

"Amazon sells everything," Barrett said. "The core features of Fire TV are the media features, but I'd be shocked if we didn't see e-commerce make it to the device."

Added Barrett, "Their interest at the end of the day is not be Netflix. It's to be Amazon."

From the article, "Amazon's Fire TV Box: No-brainer strategy, but will it light up retailer's revenue?" by Todd Spangler.

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