Amazon.com launched an Internet video-streaming and gaming device - the $99 Fire TV - as the e-retailing giant looks to grab a spot in the living room to promote its own content services and get an edge on rivals including Apple and Netflix.
As expected, Fire TV will stream Amazon's Instant Video and Prime Instant Video, the unlimited movie and TV service available through its free-shipping program. It will also provide access to Netflix, Hulu Plus, YouTube and other video services including WatchESPN, Pandora and Showtime Anytime, and games, apps and photos.
Amazon's Kindle division, said the new device will provide better search, faster performance and access to more content services than current options on the market like Apple TV, Google's Chromecast and Roku boxes. All told, Fire TV has three times the performance of each of those devices, he claimed.
"This is a powerful device," Larsen said, at the company's launch event today in New York. "It's the best way to watch Netflix... This isn't a closed ecosystem."
The device goes on sale today. Eligible customers will get a free 30-day trial of Amazon Prime when they purchase a Fire TV.
Fire TV supports 1080p video, and the thin, square-shaped device fits comfortably anywhere in an entertainment center or behind a TV, Larsen said. Android-based box sports a quad-core processor, a dedicated graphics processing unit and 2 gigabytes of memory. The device includes a Bluetooth-enabled remote control, and has a predictive-analysis feature dubbed "ASAP" to guess what TV show or movie title a user will watch next. Fire TV also supports voice-recognition to search for content.
Larsen said Amazon has invested "hundreds of millions of dollars" in content since 2011, which includes several exclusive pacts for TV shows including Fox's "24," CBS's "Under the Dome" and kids' far from Nickelodeon. He also touted Amazon Studios' original series, including John Goodman-starrer "Alpha House," Chris Carter's "The After" and dramedy "Mozart in the Jungle."
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Amazon Fire TV will include an optional game controller, for $39.99, and next month will offer thousands of games on the box. The company said it has deals to bring games from Disney, EA, Gameloft, Ubisoft, Sega and others to the device. The average price of a paid game will be $1.85, and there will be more than 1,000 games that are free to play.
In addition, Amazon Game Studios is developing games from the ground up for Fire TV. Execs showed a demo of "Sev Zero," a first-person shooter set in outer space.
Next month, Amazon will add the ability to stream music purchased from the e-retailer with lyrics synchronized on the TV screen. FreeTime, a feature Amazon developed for the Kindle tablets to manage the content kids can access on tablets, will also come to Fire TV to let parents "white-list" content on the set-top box.
On one level, the Amazon box will compete primarily with the $99 Apple TV, the $35 Chromecast and Roku (whose devices range from $50-$100). Those three devices each provide access to Netflix, YouTube, Hulu Plus and HBO Go. Amazon's video services are currently only on Roku.
But with the connected-TV hardware play, Amazon also is aiming to give itself real estate on big-screen HDTVs to feature its media services. The company's chief competitor in electronic sell-through is Apple, and Amazon is spending heavily to bring original and exclusive series to challenge SVOD leader Netflix.
The Apple TV business generated more than $1 billion in revenue last year, according to CEO Tim Cook. That figure includes both hardware sales and content sold through the boxes.
At this point, there's a big opportunity for Amazon to carve out share in the fast-growing market. About 14% of U.S. broadband households had a streaming-video media device like a Roku or Apple TV in 2013, according to Parks Associates. Overall, the research firm projects sales of connected-TV devices, including streaming players, smart TVs, videogame consoles and other products, to reach 330 million annually by 2017, nearly double units shipped in 2013.
Amazon's launch of Fire TV come after its successful foray into the tablet space with the Kindle, which provides access to video, books, songs, apps and other content purchased through the e-commerce portal. The company sold an estimated $4.5 billion worth of Kindle e-readers and tablets in 2013 and is projected to hit $5 billion in Kindle device sales this year, according to Morgan Stanley.
Reports of Amazon's project to create a set-top surfaced last year. It reportedly had been shooting to launch a connected-TV device in late 2013, but evidently missed the window on the holiday-shopping season.
Amazon held the announcement at Manhattan's Milk Studios, replete with a living-room set centered around a gigantic central HDTV and flanked by two other screens. Event had a movie theme with posters lining the walls and Amazon doled out popcorn and candy to attendees.