Could Amazon replace cable TV?

Could Amazon replace cable TV?

Edward Boyhan, one of my most insightful commenters, really got me thinking.

Edward said (in part):

“For me the most interesting item was in the 3Q guidance where they are forecasting substantial operating losses. Given Amazon’ ability to tune numbers such as these, I wondered why they are electing to take such a large 3Q loss? They explicitly ruled out any acquisitions, restructurings, or legal settlements in this forecast.

I wonder whether this might be a harbinger of new products, and especially aggressive pricing of same. The rumor mill has pretty much laid out what to expect on the KF front. Unknown is what they are going to do on the RSK front. I think they will be announcing some kind of set-top box — which I’m hoping will be something like Google Chromcast on steroids.”

I think Edward may have sussed out something very important.

Picture this…

Amazon introduces a TV gadget. I think the term “set-top box” may have been obsoleted by Google’s Chromecast. Let’s say it plugs into your HDMI port (as Chromecast does), and it’s self or vampire powered (it doesn’t need to be plugged into to the wall, it sucks juice from the TV). Even if it has to be plugged in, that’s okay.

Further, Amazon has paid the major networks to run their broadcasting…so you get the current seasons. That would cost Amazon a lot of money.

Maybe you only can get the current programming if you are a Prime member. You could watch a lot of other things without that, but they could make Prime very attractive. So attractive that people become cable cutters.

Once you are a Prime member, you spend a lot more at Amazon, from what we’ve heard…and on profitable things, like “diapers and windshield wipers”, as I like to say.

Wait, I’m not done speculating. ;)

When it turns on, you see an ad for Amazon…like the lock screen we get on the Kindle Fire, or on our non-Fire Kindles. You can click something (you can use a device, like your Fire or a SmartPhone as a remote) to buy what’s in the ad.

Also, there  is an added Amazon shopping channel. You can go there and order things (both digital and physical) directly from Amazon.

From your TV…on your couch.

It can bring you X-Ray for Video…and you can buy things you see on TV (you want that t-shirt on The Big Bang Theory? Done).

There might be a Prime and a Super Prime membership, but that might not be necessary  if people’s buying increases enough.

I think that could be the push that a lot of people need to finally cut the cable and dump the dish.

Would it be expensive for Amazon? As all get out. ;) Might it be worth it? In the long run (and that’s the only way Amazon thinks), yes, it could be.  Many people don’t like their cable providers much…if this could be done well, I think people would drop them in a hurry.

What do you think? I’m just speculating in pixels…but this strikes me as a possibility that would surprise a lot of folks, and fit into a Amazon’s strategic plans. Feel free to let me and my readers know what you think by commenting on this post.

Thanks, Edward!

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

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13 Responses to “Could Amazon replace cable TV?”

  1. Helen Burns Says:

    Perfect timing as we consider cutting cable. The next question is, especially if you are not in a major market, can you get the internet speed at a reasonable price, reliably and at peak times?

    • Bufo Calvin Says:

      Thanks for writing, Helen!

      That’s an interesting question, and it depends. :) It’s also going to change a lot in the future. Google Fiber might be part of that, and phone companies doing something…and yes, there are people who do it with dishes.

  2. Tuli Reno Says:

    About once a year I decide to get cable. This usually happens around the beginning of baseball season. And then I realize I’m not really watching much baseball on my TV since I have MLB.tv on my computer. The only problem there is that MLB.tv blacks out local broadcasts, San Diego Padres in my case. So, if I need to see them, they’re a short bus ride away.

    I find that there are maybe two programs I will be watching regularly when I have cable. This time around it was the usual L&O and The Big Bang Theory. I can’t seem to justify the cost of cable for how little I watch. I used to think I could purchase the DVDs for the amount I was paying for cable monthly.

    Now, I don’t need cable or DVDs. I have Netflix, streaming and DVD. I have Prime. I can log onto Hulu. I can download the incredibly wonderful PBS programs.

    Oh, I have an iMac 21″ so, I’m not really missing the television set itself.

    I have, BTW, ordered the Chrome thingy. Amazon has no idea when they will be able to send it to me. I think cable may be in its death throws.

    I suspect that they were not thinking that another technology could undermine a business as ubiquitous or important as they thought they were. Shades of the the big publishing companies when it came to e-books.

    • Bufo Calvin Says:

      Thanks for writing, Tuli!

      Good observations. It’s weird to me that we mostly have the cable for my Significant Other, since I’m a much bigger input hound. ;) I could get by just with old stuff, myself…there are some things I watch live, but I could skip them.

      Well, one of the things I’ve said before is that when somebody loses their position as market leader, it’s not from underestimating their competition…it’s from overestimating their customers’ loyalty. I think that’s often the case.

  3. Booklover Says:

    We have Netflix, Prime, and two Rokus. We actually have cable, too, since it saves money on our bundled telephone and internet service, but the only thing we’ve watched so far this year on cable is the Tournament of Roses Parade. We may have watched one movie on cable, but I can’t remember for sure. We don’t watch a lot of tv, and when we do, we would rather watch an episode or movie than try to find something on and sit through commercials. My child is quite happy choosing appropriate cartoons with Netflix, Prime, and FreeTime, and has no experience with cable or channels.

    • Bufo Calvin Says:

      Thanks for writing, Booklover!

      Yep, we have the three-part bundle, too, and that is a part of it. I suspect that many of the New Millenial generation and below won’t think about channels much at all within ten years or so…just “on demand” and flavors of shows (rather than specific sources).

  4. Edward Boyhan Says:

    Thanks for the kind words, but I didn’t think it through as much as you have :D .

    Actually, I think there’s an offering that Amazon could provide rather quickly that would leverage all the content deals they already have in place, and wouldn’t cost too much to start. When it comes to video and music content, Amazon has a huge leg up on everyone else (with the possible exception of Apple for music).

    To explain I need to delve a bit into how Amazon’s content delivery services work now, how Google Chromecast works, and what Amazon might offer in the fall.

    Right now Amazon separates music, video, and books into three separate delivery streams (I’m going to try and keep this simple and only hit the high points — not every which way you can get content from Amazon. For music you basically use a “player” app on your device. Sometimes this is a dedicated app; sometimes a web app. Books also use a dedicated app — usually referred as the “kindle” reader app on the device or PC.

    Video is handled somewhat differently — it is streamed directly to “compatible” devices. Some TV’s are supported — some not (you can usually get around incompatibility issues by using a 3rd party box like Roku. You can also use the HDMI out connector on KF HD’s and run an HDMI cable into your TV, but that is ugly and has unsightly cables running around.

    Chromecast is a bit more elegant, but also restrictive in some ways. Chromecast is a dongle that plugs into an available HDMI port on your TV. The dongle then communicates to your internet router over WiFi. From any WiFi connected device you then communicate with compatible services on the internet (at present there are only two: Netflix, and YouTube) and direct them to stream selected content to the dongle (and thence to your TV). On any internet connected PC you can also add an extension to your Chrome browser such that anything you are looking at in the Chrome browser window can be “mirrored” to the dongle and shown on your TV. Reviewers have stated that this latter capability can be unworkable unless you have a very fast internet connection and a fast (at least Wireless N) router. This approach avoids any content licensing issues (the user must have valid Netflix and YouTube accounts), however the Netflix and Youtube apps on your mobile devices must have the Chromecast feature enabled. To expand beyond Netflix and YouTube, Google must convince other service providers to modify their apps to add the Chromecast extensions.

    What I’d like to see from Amazon is some kind of similar dongle (although it might use a different H/W technology such as WiDi, or Miracast — there are pluses and minuses to going beyond simple WiFi). Let’s call this the Amazon Media Caster (or AMC). Associated with this would be an app for every mobile device and PC in the world just as there is for kindle reader apps. Lets call this the AMC Player. From this app (which might be a web app on some devices) one could ask Amazon servers to stream video music or books to the AMC. So your mobile device (or PC) in effect becomes a visual remote control for your TV. Things like Xray, search results, dictionary lookups, etc could be displayed on the mobile device instead of on the TV (or on both or on the TV only). You could also instruct the AMC player to mirror the content on the mobile device or PC as well as displaying it on the TV.

    They could also implement browser extensions for the big 3 browsers to mirror browser content on the TV — although I might prefer that they develop some kind of AMC device driver such that anything on the PC screen could be displayed on the TV (basically letting the TV be a second monitor for the PC without the need of any cables.

    Amazon can do this with a relatively simple H/W device, some apps, and let all the stuff you can already get from Amazon to be wirelessly displayed on your TV. They could then do additional deals with content providers to gradually evolve into a complete cord-cutting scenario :D

  5. Tuxgirl Says:

    The munchkin is always confused when we go to my parents house because there, her favorite tv shows have specific times they are on. At home, we get all our tv from amazon — some purchased, some prime.

    Well, okay, we do get a little from some other roku channels… :)

    • Bufo Calvin Says:

      Thanks for writing, Tuxgirl!

      Yep, times are definitely changing!

      Have you tried Pub-D-Hub on Roku? I’ve watched a lot of that one…not all of them are kid-friendly, by the way, but there is a lot of good older stuff there.

  6. Norma Beishir Says:

    I’d get on board with this. I’ve had issues with both satellite and cable (even though our cable provider is always advertising that they don’t have the issues that satellite has in bad weather).

    • Bufo Calvin Says:

      Thanks for writing, Norma!

      I rely on our cable provider for internet, primarily. We certainly use the TV, and we still pay for a land line…although we could drop the last one pretty easily.

  7. Mary Says:

    In our household, Netflix is much more useful than Amazon (even as I’m writing this (awkwardly) on my Kindle) because on Netflix, nearly everything has captions, but on Prime, surprisingly little does. I still like Amazon best for a lot of things, just not for streaming.

    • Bufo Calvin Says:

      Thanks for writing, Mary!

      Actually, I have been finding more closed captioning on Prime fairly recently, but Netflix does seem to have a lot of it.

      For me, it is the Netflix interface. It always takes some digging for me to get back to something I was watching on Prime, whereas Netflix has it right at the top.

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