Why Amazon Is Getting Into the Hardware Business

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

April 2 (Bloomberg) -- Brian Blair, an analyst at Rosenblatt Securities, and Bloomberg's Cory Johnson discuss Amazon's new Fire TV device with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Business right now?

They want to get more software out.

This is a company that was the leading provider, the seller of dvds, and that has gone in favor of streaming.

There services nowhere as near as netflix, but the impediment is just getting the stuff to the tv.

With this device, it puts their stuff front and center or even on the tivo box or comcast boxes.

While they might offer something from amazon, it is hard to find.

I think it will give them an advantage.

They already have a lot of the media content.

It is not just about movies and tv shows and music.

They are adding a gaming site as well.

This is an attack on the electronic arts.

They are actually making this -- taking smartphone-like games and bringing those lower prices and high quality games to the living room.

Instead of $60, you will get high-quality gains in the two dollar price range.

I see this as where amazon is going to take every part of the living room, not just tv and tv shows with original content, but games, music, and there is a cloud feature where they want to give you access to your photos or anything stored in the cloud on a $1.99 device.

How do they succeed when so many others are trying to do exactly the same thing?

Nobody else is offering all of these things together right now.

I think that is what amazon's that is.

Rochus has a lot of channels -- roku has a lot of channels.

But nobody is putting together this many pieces.

People are spending enough as it is on the cable platform and on content.

Whether you have a two dollar a month cable bill or in a dollar 99 netflix bill or hulu, are people really going to absorb one more bill?

It is a fair point, one worth thinking about.

I think that is part of the context here.

Amazon recognizes that you have comcast and they deal with netflix to make the netflix signal arrive to your tv faster with competing services like amazon.

Amazon is tried to go around the cable arbeiter, particularly around comcast and time warner who are for now separate companies and may not be in the future.

Amazon, with this box, is able to go around those providers to really put their content from an center.

But you need to have the content.

Let me just jump in and point out you need to have the content.

It is fine that you are going to go around, but people need to want to watch it.

They thought "alpha house" would be a big success but it pretty much failed.

That is one of the few shows i can think of that amazon has done.

How do they get their "house of cards"-type?

They will have to find something pretty sharp to compete with "house of cards." but that is what is critical here.

Amazon isn't just trying to be a distribution platform.

They are actually creating content.

They will create their own shows, their own games.

There were at least 12 games shown today that did not exist.

Amazon, for a couple of years, has been working quietly on its own video games.

Amazon is not just a set top box provider but an original content provider which is an incredibly powerful change for the business model.

Amazon sells everything that we might want.

So if they capture us in our living room -- one-stop shopping.

Yeah, if you like something that is being worn by a particular character -- these subscriptions go hand-in-hand with their most frequent customers, the customers who get it in day delivery.

-- you get second day delivery.

You've seen this company spend nearly $5 billion last year.

That is that use expenditure.

That does not include the catholics for long-term projects.

-- that does not include the f cafx for long-term projects.

Should netflix be worried?

Absolutely.

This is a shot against apple tv, against roku, but definitely against netflix.

But netflix will be on this fire tv, so is apple tv and youtube.

Amazon says we will serve out that content but also offer our own original programming and the debt will be over time will has the best content and basically who has everything in one place.

Right now, amazon is the only guy who is try to provide everything.

Does this mean netflix will come forward with some kind of device of its own?

It is the only player out there that is not offering the hardware.

They have not gotten a lot of credit for making partnerships with the tivo of the world and apple tv of the war than the cable providers to make sure that there is a netflix option on their hardware.

There are three approaches.

There is the game console, the tv-like devices, and then you've got the smart tv itself, which is samsung and lg and sony as well.

It will be interesting which of those approaches works the best.

Whether the commodity of the set itself stays a commodity or if you want to have it all rolled up into one or if you want to have a very robust game console and get the ea's developing for you.

This surprise announcement is the gaming side.

There was a kick starter project to try to do this.

They tried to bring smartphone game strictly to the television.

It has not been that successful.

There is a company called steam that allows you stream to your pc.

I think they are grabbing some of these newer business models and deliver in a very powerful manner.

That is something no one else is doing.

Smartphone games globally, billions of global downloads and nobody else's really try to bring that into the living room in a meaningful way.

As of today, amazon is doing that and that could be the surprise piece of this announcement.

Coming up next, christine

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change