Amazon Fire TV and the Set Top Box Market

Amazon Fire TV Set top boxes

The television is one the most obvious places where internet connectivity could be advantageous and a very large revenue stream for any company that can gain share, and I don’t mean simply in hardware.  The TV market is of course very wide and there are countless amounts of companies, ranging from low end to the new curved 4K 105 inch TVs from Samsung and LG.  Many of these new sets are smart TVs and can connect to the internet and stream media and allow a platform for apps to run directly on the screen.  This concept is great, but this technology can move quickly and no one wants spend as much money as a tv costs every time they are interested in an upgrade.  This is where the set-top box (or dongle) comes in.

Amazon has entered the market very recently, with the Fire TV and with this, there are now 4 major players in the set top streaming market: Apple, Roku, Google and Amazon.  Apple and Amazon have set-top boxes only, Google has a dongle (although Android TV is a rumor), and Roku has both. Whether you should go with a set-top or a dongle is really dependant on your needs and expectations.  A set-top box will give a more traditional tv experience and will have more features, but will also cost more, so that is simply a matter of preference.

There is a lot of advantages to having a TV peripheral and they are relatively inexpensive, no more than $99, which is way less than any smart TV you can get with the same amount of features.   This means that you can get the same features for less money and the hardware can be replaced for significantly less than buying a new TV.  The potential for this market is massive and growing, especially with such big names getting into the game.  Side note, of the four, Roku was first, coming 5 years before the others.

Now, what can a company do to exploit this box besides just selling the hardware?  The obvious answer is software and media, with the Apple and Google streaming devices there is more incentive to buy from iTunes and Google Play respectively.  But lets be honest, your side of that battle has probably been chosen before you ever get a peripheral from either of those companies.  Amazon could also be put into this category, however I feel like Amazon may have one more trick up their sleeve.

Amazon is selling hardware, but that is not where their revenue is, as we all know, Amazon is an ecommerce monster.  With this in mind, how could Amazon take advantage of owning your TV experience?  By selling you things of course.  What if during a commercial, on standard cable, your Amazon set-top recognizes the product and with a simple click of your remote, you could add that product to a wishlist or straight to your cart?  This and the fact that Amazon Prime members get easier access to their streaming movies and music, and if Amazon’s past says anything, there will be even more perks for their Prime members.

The bottom line is a smart TV is a large investment and once it is a few years old it could be outdated, and for the same amount of money spent on a smart TV, a better “dumb tv” could be bought.  A very nice “dumb TV”  in combination with a set-top or dongle could vastly outperform a smart TV, cost less and be more readily upgradable.  This versatility makes this option a better overall deal, but it does require some research into several different devices and an interest in upgrading, so both the smart TV package deal and the set-top will have a place in the market.  This type of readily accessible customization could be the way of the future though, when it comes to consumer technology. Get one great piece of hardware, and then upgrade according to needs and financial situation of the consumer.  This customizable set-top concept could be the beginning of something big.

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