Kyle
Bloomberg has reported that Amazon’s stock price has gone up and then slightly flattened this afternoon and Netflix has definitely felt stemming from an announcement Amazon made today.
Amazon, the company that essentially created the e-commerce category, or at least heavily refined it, announced today that they are going to start offering their own set top box. In the same way that Google and other tablet manufacturers grew quickly concerned about the ramifications stemming from the Kindle Fire tablets, the set top box manufacturers now have something to worry about.
The Seattle based company will now offer a box that competes with the likes of Apple TV, Roku, Boxee, NetGear and even some options offered by console gaming system. Currently, several of these competitive boxes offer Amazon’s video subscription service that comes free for Amazon Prime members.
Just as Google has added a wide range of other services beyond it’s huge search platform, Amazon has continued to grow into a complete e-commerce ecosystem. Of course they want customers to continue to engage with their bread and butter, e-commerce business, but now they are able to engage customers in more intimate ways.
Amazon built their Kindle Fire tablet line based on the Android operating system and then created their own completely walled garden ecosystem that offers their tablet users access to apps,games, e-books, movies and music all through the Amazon e-commerce platform. Many analysts say this was a great move on their part.
This move also opens up a whole new platform for developers to get behind and support. Apple TV is an extremely hard platform for developers to get into and many feel that Android, and it’s hundreds of available devices and fragmented OS is tough to penetrate market share.
Developers and perhaps startups will now be able to work on the Amazon set top box ecosystem to offer apps, games and other downloadables to compliment the content platform that will be in place at launch.
Amazon has built up a tremendously loyal following over the last two decades. They have also been instrumental in moving some customers from books, to e-readers and now to tablets. With this huge set of customers, an Amazon set top box will be a much more comfortable platform, rather than going with the boxes that are currently on the market.
NetFlix, a huge content delivery company, will now have to compete with Amazon because it’s not likely the Amazon box will carry the NetFlix app. Also, first run movies and TV seasons tend to take longer to get into the NetFlix system than say Amazon’s video delivery service or even iTunes. This will give Amazon a huge competitive advantage.
Amazon also plans to create their own content, a model that’s proven very successful for NetFlix with their in house produced series like House of Cards and Hemlock Grove.