Tomorrow will be an important day for Amazon.com (NASDAQ:AMZN). It's staging a media event in New York City, promising reporters an update on its video business.
The odds favor that Amazon rolls out the set-top streaming-video device that's been rumored for months, but let's not assume that the "Fire Tube" device is all that we'll be seeing tomorrow. Would Amazon really be dragging tech reporters to a media event if it was just reinventing the wheel? Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), and Roku have already sold millions apiece of their devices.
It's going to be hard for Amazon to stand out on hardware alone. It's hard to fathom it coming in cheaper than Google's $35 Chromecast, and it may be hard to top the features of Apple TV, or the growing number of options in Roku's growing catalog.
The Wall Street Journal has already chimed in twice this year with unnamed sources discussing two different service-related offerings. We first had the January chatter centering on Amazon having talks with broadcasters and networks to license their television channels for a new online pay-TV service. This would be a game changer, of course, but it doesn't seem likely. Google tried and failed in getting studios to warm up to Google TV, and consumers eventually cooled as well. If Apple would have finally "cracked" the code as Steve Jobs told his biographer, don't you think we would've had a full-blown Apple HDTV or Web-based TV service by now?
Amazon doesn't necessarily possess any major advantages over Google and Apple in negotiating with the content creators since all three tech giants already sell plenty of digital entertainment. All it has is its ability to introduce cutthroat pricing on the hardware end, and Google's cheap Chromecast and the open-source nature of Android shows that it's not afraid to follow suit.
The Wall Street Journal then turned heads again last week by reporting that Amazon was considering a free ad-supported streaming service. The thinking here is that it could offer the growing catalog of commercial-free videos that it makes available to Prime loyalty-club shoppers at no additional costs to freeloaders willing to put up with ads along the way. This platform never made sense. Amazon just increased its Amazon Prime service by 25% to $99 a year. Would it really boost prices just days before making a major feature of that membership available to everyone else for free? That would just be bad business.
But Amazon will have to offer something more than just a device. The Kindle stood out because it was attached to a vibrant ecosystem, but Google and Apple already have healthy solutions as the companies behind the two mobile operating systems of choice. If tomorrow is just a set-top box with seamless access to Amazon's existing video offerings there's no point in rounding up tech bloggers that will leave disappointed. Just push out a press release and promote the new offering on the Amazon.com landing page.
No, tomorrow will have to be bigger than that. This will be more than just a set-top box. This should be more than just a digital-video locker. Amazon's talking about entertainment. It better be entertaining.
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Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Google. The Motley Fool owns shares of Amazon.com, Apple, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.