Amazon unveils $99 Amazon Fire TV for streaming video

The set-top box goes on sale immediately and features content from the likes of Hulu Plus, MLB, Disney, YouTube, Netflix, and, of course, Amazon Instant Video.

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VP of Kindle Peter Larsen on stage at Amazon's video event. Sarah Tew/CNET

Amazon unveiled new video-streaming hardware on Wednesday, a move that pits it against market leader Roku and Apple TV in a fight to be the entertainment engine in consumers' living rooms.

The Fire TV device costs $99 and features 2 gigabytes of RAM, Wi-Fi, a Bluetooth remote, and access to numerous content providers, including Hulu Plus, Watch ESPN, Showtime, MLB, Disney, YouTube, Netflix, and, of course, Amazon Instant Video, the company said at an event in New York today.

Check out CNET's first take on this latest video-streaming device to join an already crowded market. The Fire TV, which also features a gaming controller accessory, went on sale on Amazon's site following the event. It joins the ranks of Apple TV and the Roku 3, which both cost $99 as well.

Staples said it will also sell the Fire TV device online starting April 5, and carry the device for sale in its physical stores starting April 27, according to a press release from the retailer and Amazon competitor.

Video streaming has become a growing part of Amazon's focus as it looks for more ways to keep its users tied to its site and services. In addition to offering video titles a la carte, Amazon's $99 Prime membership bundles unlimited streaming services with free, two-day shipping and gives subscribers access to its Kindle e-book lending library. While Amazon has added more original programing in hopes of competing with video-streaming kingpin Netflix, its share of online streaming videos is still under 2 percent.

Peter Larsen, vice president in charge of Amazon's Kindle tablet business, said the company identified three problems that customers found with other video-streaming device: search limitations, performance issues, and closed ecosystems. The Fire TV aims to address these issues.

"We need to invent and simplify on behalf of customers," he told reporters.

Larsen said the 2 gigs of RAM will address performance; the large library of content addresses a closed ecosystem; and a microphone installed in the device's remote allows users to perform voice searches for titles instead of having to enter titles in letter by letter. The device also mimics many Kindle Fire tablet features.

The company had been trying to keep the new device under wraps for months, with rumors swirling about how Amazon would approach its next phase of digital media streaming. Rumors ran the gamut from the company introducing a device like the Roku Streaming Stick to the possibility of a TV set-top box that would include a game controller, the latter proving closest to the mark.

Amazon going the hardware route is a play to increase its viewership numbers. While the company does not disclose how many viewers it has, it has said that its uptick in Prime members late last year was due in part to customers who wanted access to Amazon Instant Video. The company also does not share its Prime membership numbers but has said it's in the "millions." Amazon video streaming is estimated to account for 1.6 percent of peak Internet traffic in North America. In contrast, Netflix gobbles up 31.6 percent of peak Internet traffic and boasts 44 million subscribers.

Amazon has long believed in putting devices in people's hands that encourage them to consume more content. The company did this when it launched the Kindle Fire tablet as a cheaper alternative to the iPad. Although the company didn't make any money off the device, and sales have started to lag, Amazon is making the same bet on video streaming.

Amazon will have to compete with more than just content. It's entering a space that is dominated by well-established devices like Roku and Apple TV. Plus, the more limited Chromecast has it beat on price.

But Neil Doshi, an analyst for CRT Capital Group, said Amazon has an important advantage over those competitors -- prominent placement on the Amazon home page to drive sales. Plus, it offers more gaming options than other devices.

"We've seen good success with Kindles, Kindle Fires, and Amazon was not first to market with those devices," he wrote in an e-mail. "Unlike the Roku and Apple TV, Amazon Fire TV lets people play social and harder-core games which we think will appeal to consumers."

Amazon has long believed in putting devices in people's hands that encourage them to consume more content. The company did this when it launched the Kindle Fire tablet as a cheaper alternative to the iPad. Although the company didn't make any money off the device, and sales have started to lag, Amazon is making the same bet on video streaming.

Read more about the announcement on CNET's live blog.

Update, 12:35 p.m. PT: Adds comment from analyst.

Update, 11:44 a.m. PT: Adds information about Staples.

 

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