Yesterday, Amazon announced the launch of Fire TV, a $99 set-top box for streaming media, putting it in the marketplace of Apple TV, Roku 3, and Chromecast.
This move, Pete Wallace, head of performance at Total Media, believes, will help Amazon pursue the media budgets that it really wants.
“This is due to three key factors: data, multi-channel and brand opportunities,” he states.
“Using first party login data that understands people’s purchasing behaviours, viewing habits and online consumption is an incredibly powerful asset. Amazon already had the data in abundance and continues to grow this through Fire TV. If they are able to use the data to maximum effect, it could make them incredibly appealing to advertisers.”
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Amazon's worldwide net ad revenues increased 34.9 per cent in 2013 to reach $718.3m according to eMarketer, up 52.4 per cent from $532.5m in 2012.In total, digital video ad spend in the US reached $4.18bn in 2013, while in the UK this figure was £293m.“While the digital video market is growing substantially at 95 per cent (year on year), digital services won’t necessarily attract typical DVD buyers and become mainstream until the proposition is much simpler for consumers to use and available within the main family room – Amazon’s launch today of Fire TV is another step closer to getting these customers on board with digital,” Fiona Keenan, strategic insight director at Kantar Worldpanel suggests. “Amazon already has a large consumer base who have a clear appetite for film and TV content – 8.5 million consumers bought a DVD or Blu-ray from Amazon in the past year and there were 1.9 million active Amazon Prime Instant Video users – both groups present an opportunity for Amazon to target with Fire TV.”But with competition from Chromecast, the dongle which turns TVs into smart TVs
, how will Fire TV stand out in the crowded market?Making the announcement yesterday, Peter Larsen, vice president of the company's Kindle division, promoted its speed, as well as the fact it has a voice-activated search and that it offers the lowest cost option to watch a show, be that on Amazon Instant Video, or another provider, such as Netflix or Pandora.Keenan isn’t sure about this though, stating: “There isn’t much of an incentive for current digital consumers to purchase a set top box which effectively allows them to do something they can already do – only if Fire TV is able to offer something unique will it convince these consumers to pay for this additional device. Larsen is keen to point out the differences between Fire TV and its rivals – Chromecast in particular - citing the larger memory of Fire TV, the fact it also includes games and the larger range of TV channels.
“Currently, there is huge focus on multi-channel strategies and Fire TV allows Amazon to use this approach in much more depth. Combined with the rich data already stored, it puts Amazon in a great position to provide a truly cross-device offering, which arguably should be more accurate, engaging and far reaching than products based purely on IP address,” Wallace adds.“Taking on a channel immersed in gaming and entertainment should produce much more creative formats – enabling Amazon to make a really compelling pitch for those larger brand budgets which all publishers strive for. “Ultimately to an advertiser, this proposition could serve as a real game changer for Amazon,” he concludes.