Amazon launches TV streaming and gaming device

Dave Limp, vice president of devices at Amazon: "Fire TV is a great experience for customers"

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Amazon has launched an internet-connected TV set-top box as it vies with Apple and Google to gain a share of the lucrative television market.

Dubbed Amazon Fire TV, the device is a small black box similar to Apple TV. It will cost $99 (£59) and is available immediately in the US.

It will allow consumers to stream content from Amazon's library, as well other video-on-demand services, directly to their TVs.

The device can also be used for gaming.

Analysis

Forget ratings wars, the biggest battle in your living room is for the TV.

To emphasise the point, at its launch event in New York, Amazon decorated the room with comfy armchairs, bowls of sweets and even a popcorn machine.

Fire TV, Amazon's Android based streaming gadget allows you to access content online.

With its matt black finish, the slim design is reminiscent of Apple TV and is supposedly three times more powerful.

The remote control has a microphone built in so that you can do voice searches. This worked smoothly even in a loud room full of journalists.

Amazon's set top box may not be revolutionary but it does give customers an alternative to Apple TV, Roku and Google's Chromecast.

"People play games on tablets but they want to play on TV," said Amazon's Peter Larsen.

The firm has formed partnerships with gaming firms such as Sega, EA, Disney and promises thousands of Android titles will be available next month. It is also expanding Amazon Games Studios to build bespoke games.

Users can buy a games controller, dubbed Voila, which looks very similar to an Xbox controller.

The move puts Amazon in direct competition with Apple TV and Google's Chromecast as all try to find a way into the living room.

The box comes with a Bluetooth-enabled remote, which means it does not have to be pointed at the TV to work.

Despite its ability to stream shows and films from alternatives to Amazon Instant Video - including Hulu, WatchESPN and Netflix - there are some big content providers missing from the list, notably HBO Go.

The BBC's Michelle Fleury tests Amazon's new TV set-top box, Fire TV

Box battle

Currently there are three main ways that consumers can stream video-on-demand services to their TVs:

  • a dongle
  • a set-top box
  • a games console

Roku claims to lead the field when it comes to net-connected set-top boxes.

Meanwhile Apple's figures indicate it shipped about 10 million of its set-top boxes last year, and Google recently entered the fray with a $35 (£21) dongle that plugs into a television's HDMI port and allows users to stream content from smartphones, tablets and computers.

How Fire TV will look on the TV The TV interface also allows users to play games

"Amazon's move is essentially the final piece in a three-way battle between America's internet heavyweights for tomorrow's TV screen," said David Watkins, an analyst with Strategy Analytics.

"It's like Dr Pepper challenging Coke and Pepsi's empire. Apple's there already, Google joined last year, now all will be up against the incumbent pay TV providers.

"To thrive, however, they'll probably have to do partnership deals as Apple has been trying."

Growth in digital media

  • The global market for OTT TV devices (comprising IP-enabled TVs, Blu-ray players, digital media adapters, games consoles and set-top boxes and DVRs) is set to grow 19% in 2014 to reach over 325 million units sold
  • Although digital media adapters (DMA) such as Apple TV and Roku are only expected to make up 7% of overall OTT TV device sales in 2014, the DMA market is expected to be one of the fastest growing categories this year with sales set to grow 24%
  • Apple leads the market followed by Roku and Google and, collectively, the three brands account for close to 70% of global DMA sales
  • DMA adoption is most advanced in the USA where close to one in five households are expected to own a dedicated media streaming device by the end of 2014.

Source: Strategy Analytics

Amazon has a lot of its own content to put on such a device though.

"It makes sense for Amazon to try to tie everything in to its eco-system and is the logical next step after the success it has had with the Kindle," said Ovum analyst Jonathan Doran.

Recent research from Consumer Intelligence Research Partners (CIRP) revealed that Kindle owners spent, on average, $443 (£266) a year more than the Amazon shopper who does not own a Kindle.

Now Amazon is looking to do the same with video.

In 2011 Amazon released its Instant Video service, and it has invested huge amounts to create a large catalogue of movies and TV shows. The service is offered to Amazon Prime customers for free instant streaming.

Amazon Prime currently has more than 10 million users worldwide, with the bulk in the US, according to the Strategy Analytics consultancy.

Last month the firm put up the price of Prime from $79 to $99 per year. Subscribers can rent a Kindle e-book each month, access its video library and obtain free one-day shipping on items sold via the Amazon website.

Online viewing

Although it makes sense for companies to gain a share of the on-demand video market it is not always good news for consumers, according to Mr Doran.

Games controller A games controller can be used to play titles including Minecraft, Asphalt 8 and The Walking Dead

"There can be too many things to choose from and I have yet to see one device where you can do everything," he said.

"People have to keep chopping and changing between devices to get different content."

The nature of how people view video content was changing, said Jay Fulcher, chief executive of online video tech specialists Ooyala.

"Over a quarter of online video viewing is happening on a mobile or tablet, that platform has become mandatory for content publishers," he said.

"All of the technology companies are building infrastructure to connect to the new economy forming around television so that people can watch what they want, when they want in a seamless way."

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