Amazon Set-Top Box Coming By End Of Year: WSJ

10/03/2013 05:21 pm ET

Amazon is planning to invade your TV set.

The Wall Street Journal reports that the world's largest online retailer will release a set-top box that will stream online video to your TV. The device is code-named "Cinnamon," and will have apps for playing games and streaming video and music from other companies, not just Amazon, according to the WSJ. It will be released for the holiday shopping season.

Amazon's plans come at a time when there is no shortage of ways to stream Internet content like Netflix, Hulu and YouTube on your TV. Roku and Apple TV are the most popular set-top boxes, and game consoles like the Xbox 360 and Playstation 3, as well as DVRs and Blu-ray players, can also be used to stream. And in July, Google released Chromecast, a $35 device that allows people to watch Netflix, Hulu Plus and YouTube, among other things, on their TVs.

But Amazon's motivation to get onto your TV is more than making money from selling a little box. Jeff Bezos, the company's CEO, has said that Amazon sells hardware like its Kindle eReaders and Fire tablets at cost and makes money from what people buy using the devices. So another, very convenient, place for people to buy products and content from Amazon makes sense.

And as the WSJ notes, a set-top box could get more people to subscribe to Amazon Prime, the $79 annual service that gives customers free two-day shipping on millions of products. A Prime subscription includes access to Amazon Prime Instant Video, the company's streaming video service and a Netflix competitor. Prime members shop more frequently than non-members and spend twice as much annually, according to a report earlier this year from Morningstar, the investment research firm. They also tend to buy more expensive products.

News that Amazon was developing a set-top box was reported earlier this year by Bloomberg and the WSJ.

The price of the Amazon box is unclear, and an Amazon spokesperson did not reply to a request for comment from The Huffington Post. Roku's streaming boxes start at $50, and Apple TV costs $99.

The name of such a device is also unclear, although 9to5Google reported on Thursday that the company applied to trademark the name "Firetube" in both the U.S. and Canada, leading to speculation that it could take that name.

Last year, Apple and Roku accounted for nearly 78 percent of the streaming devices sold worldwide, according to a Frost & Sullivan report. But there is plenty of room for competition because not that many people actually have one of these devices. Roku has sold only 5 million devices in the United States, and Apple has sold only 13 million worldwide. (Apple does not break out the number by country.)

To put that in perspective: More than 115 million homes in the United States have at least one television, according to Nielsen.

Amazon already has an Amazon Instant Video app on Roku players that allows anyone to rent and buy movies and TV shows á la carte. For Prime members, the app also lets them access the streaming subscription service they get as part of their annual membership.

Amazon Instant Video is available on PCs, tablets and a number of devices, but is noticeably absent from Apple TV.

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