An Amazon set-top box would be cheap, might streams others' content

It's not clear Amazon can launch the device in time for the holidays

Online retail giant Amazon is looking to release a set-top, video-streaming device that would likely sell for close to cost.

Sources briefed by Amazon have said the company is working toward releasing the device for the holiday shopping season, according to a report by the Wall Street Journal

Known internally as "Cinnamon," the set-top box will likely be sold for around the same price or less than the industry's most popular video-streaming device by Roku. Roku's set-top box starts at $50. Apple's video streaming box, Apple TV, sells for $99.

Apple TV
Apple TV sells for $99

"Based on discussions I've had with other folks in the industry about what they're terms of hardware they're going low cost," said Brett Sappington, director of research at Parks Associates, a research firm.

Like the inexpensive Kindle reader, which is a venue for Amazon's published content, a set-top box would allow Amazon to sell video content from its existing library, such as its Amazon Prime Instant video service. "Amazon has the third leading video-streaming service in the U.S., and now they're adding hardware to support those things they're already doing," Sappington said.

A set-top box would also be another way for consumers to shop for retail goods online.

In order for Amazon's effort to be successful, however, it will have to offer more than just its own content, according to Jonathan Gaw, a research manager at research firm IDC.

Gaw pointed out that the set-top boxes, or digital media adapters (as IDC calls them), are plentiful. Gaming consoles and broadband providers all offer streaming content. So the next player coming to the market will have to include something compelling to gain any traction.

For example, if Amazon's box doesn't offer Netflix access, it'll be a "non-starter" he said. "The primary reason people stream video to their televisions is Netflix. They're not looking for the next interface," Gaw said.

Amazon would be entering a market that's still marked by uncertainty and confusion about what content is available and when. Many of the players in the field have yet to come together to standardize how and when television shows and movies are released; doing that would be a game-changer in the set-top market, Gaw said.

"Even on Hulu Plus, all the shows there are not consistent. And there you have programmers who have come together under one corporate umbrella," Gaw said.

Sappington agreed, adding that he doubts Amazon will be able to release its set-top box in time for the holiday shopping season. He said the company has just put out an open call for people to develop applications for the device, and that will likely take several months to develop.

Instead, he believes Amazon will release the box shortly after the holidays. If it does push a box out in time for the shopping season, it would likely be a basic model with few apps.

"Then, in the beginning of 2014, they will begin adding third party apps," he said.

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