Amazon.com is reportedly making plans to release an over-the-top (OTT) set-top-box (STB) for streaming device during this holiday season. Will this be another me-too device following the steps of Roku, AppleTV and Chromecast, or would there be some radical innovation in this new box?
OTT margins of are thin. In addition, most telecos and video service providers subsidize the cost STB by charging consumers for content. What is Amazon's strategy for vertically integrating into video hardware by releasing its own device verses staying as an application on 3rd party hardware?
In my opinion, Amazon, the consumer centric company is looking to provide quality and convenience at a low cost to people. With this, how then would Amazon benefit? - In the long term, Amazon will get to know you better. This means that Amazon will be collecting valuable data about your consumption behaviors. It will also put Amazon as a major competitor for "owning" the living room.
Furthermore, Amazon just announced "Login and Pay with Amazon" as part of Amazon Payments services to provide convenient payment for consumers. (Watch the video here) Looking at the strategic direction that Amazon is heading, including its patents for mobile payment service (more info here), Amazon is closing the consumer journey loop.
Therefore, we need to view the Amazon's plans on releasing a STB as part of an entire system and not as a separate service that Amazon is offering. Amazon would now be in a good position to link online-commerce, mobile-commerce, television-commerce and in-store point-of-sales. What do you think?
Reference articles:
Amazon Readies Set-Top Box for Holidays
Analyst: Amazon's planned OTT STB could be a disaster
Amazon Patent Describes A Mobile Payment System That Keeps Transactions Anonymous
Press Release: Amazon Launches ‘Login and Pay with Amazon’ for a Seamless Buying Experience
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