All of the rumors seemed to indicate that July 31st would be the day we finally heard solid details about the new Kindle Fire release. Obviously that didn’t happen. That’s not necessarily a bad sign though. While things might be taking slightly longer than fans, speculators, and analysts had expected, there are plenty of signs that Amazon has something big planned right around the corner.
The update to Amazon’s music management is a strong indication that something is going on. Amazon’s emphasis on media service integration with their devices is well known. They might not have the most powerful hardware on the market but Kindle Fires are the easiest way to get at any of the digital content the company sells that can be reasonably run on a small, modestly powered tablet. The existing model isn’t exactly at its best with music playback thanks to the speaker configuration, but the interface makes use simple enough.
Now that you can import existing music selections rather than uploading them individually, including files downloaded through other services, the appeal of that option should be increased for any interested user. As far as Kindle Fire specifics, though, it wouldn’t be at all surprising to find out that Amazon has been working on docking stations for their next tablet, which reports indicate will have a very distinct form compared to its predecessor.
The recent release of the Amazon Instant Video app for iPads is also, paradoxically, a fair indication that the Kindle Fire 2 is nearly ready. Even if a larger model of Amazon’s tablet is ready right away, there is no way that they want to be entering into head to head competition with Apple at this stage. Plenty of rumors say that Apple ‘s already taking things in that direction with an impending iPad Mini, but that rumor has been cropping up repeatedly for two years now and the reasoning doesn’t seem to have improved much in the meantime.
By creating a convenient way for Apple’s customers to access their Amazon video purchases, the need for confrontation is somewhat negated. It’s important to remember that Amazon gains very little by way of income for selling the Kindle Fire. They’d be just as happy to have an iPad user locked into using Amazon services thanks to the closed ecosystem being developed, since content is where the money is anyway. The app release here might look like a lack of confidence in the Kindle Fire, but it’s really just paving the way for a deliberately niche product.
Most importantly, and most obviously, Amazon has started selling off refurbished Kindles at ridiculously low prices. This has happened before. People who use an Amazon.com Rewards Visa can pick up a basic Kindle eReader for just $47 now through August 15th using the coupon code KINDLE40. It’s pretty obvious that something is on the way to replace that Kindle.
That doesn’t necessarily mean that we’re looking at an August 15th release date. In fact, people have largely stopped trying to guess at when Amazon will be ready. It will be here when it’s ready, but it’s safe to say that time is not far off.
Amazon is getting a bit more bold with every passing day, it seems, as they step ever-further into Netflix’s domain. The most recent such intrusion is their creation of an app for the XBox 360 that allows Amazon Prime subscribers to access the Amazon Prime Instant Video selection and stream directly to their television. Naturally there is also access for those who prefer to rent or buy in addition to or instead of working with the subscription plan. It is hard to say whether this works out well for the Kindle Fire.
The major appeal of the Kindle Fire, for a fairly large portion of the customer group, is its ability to stream video from Amazon with no trouble at a moment’s notice. Lacking as it does any form of cellular connectivity, the Fire is basically something you are going to be watching video on at home if video is being watched. It is hard to picture large numbers of people gathering at public WiFi hotspots to watch their favorite films on portable devices. When Amazon makes a move like this that offers a potentially superior in-home viewing experience, we have to wonder what the overall effect will be.
The major flaw in turning the Kindle Fire into a video streaming device has always been its lack of video output. Naturally this is not an issue when we’re talking about the XBox. These game systems are already in several times the number of homes as the Kindle Fire, especially when you factor in the Playstation 3 which got its own Instant Video app back in April. There is always the chance that Amazon’s expanding media availability will render their hardware somewhat obsolete.
There are some downsides to this new offering that will probably keep it from becoming a prime means of consumption for the majority of users any time soon, however. For one, users are required to maintain an XBox Gold subscription. This is a relatively minor expense, but it does in many cases increase the monthly cost of access to Amazon Prime Instant Video in a significant way if users do not already maintain this subscription for other reasons.
There is also no integrated purchasing mechanism. One of the biggest advantages, and sometimes dangers, of using a Kindle Fire is its quick and easy store integration. If you want to pick up a copy of the latest big name action flick, you can do it and be watching within seconds. The XBox app will require users to head to a PC for all of their purchasing before anything goes up on the TV.
If you have a chance, I do recommend giving this one a try. The interface is reminiscent of the new Netflix application for the XBox and while I can’t say the video selection is as simple to navigate, I have definitely found some surprising and enjoyable titles floating around in the past few days. I love my Kindle Fire, but the jump from a 7” screen to a 47” screen makes an amazing difference when you’re watching just about anything.
Since just before the official announcement of the Kindle Fire, and clearly in preparation for the anticipated release, Amazon has been making efforts to beef up their Amazon Instant Video selection. Many of these new acquisitions have even been made part of the Prime Instant Videos library, which allows customers subscribing annually to the Amazon Prime service to stream available content to any compatible device whenever they want with no additional purchase necessary. More than anything, this is the reason that new Kindle Fire owners find themselves enjoying a month of free Amazon Prime membership. It works well to get potential subscribers hooked. More and more, however, people have been viewing the ever-expanding collection of titles as a direct assault on Netflix.
As the most popular video streaming service on the internet today, Netflix caters to over 24 million subscribers and accounted for about a third of all internet bandwidth being used as of last fall. They have had some issues recently after mishandling the publicizing of rate hikes necessitated by expiring streaming rights deals as well as a poorly thought out attempt to split the company into two separate entities specializing in only one aspect of the physical media and digital video combination that customers have come to expect, but subscriptions have since rebounded and there is little sign that they are in immediate danger.
When Netflix CEO Reed Hastings mentioned in a letter to shareholders that he is expecting Amazon to start breaking the Instant Video service away from Amazon Prime in favor of a monthly model more analogous to what Netflix is known for, it was finally enough to elicit comment from Amazon. Brad Beale, the Head of Video Acquisition for Amazon, made clear in a recent interview that it is not the intent of the company to change the way they’re handling things in the near future. He seems to have avoided implying that this was something that would never happen, but at least for the moment Netflix is safe.
The logic behind the decision is sound. Amazon Prime is already less expensive than even the cheapest Netflix subscription. The video content you get with it is not nearly as extensive at this point as what Netflix offers, but nobody claims that it is. By subscribing to Amazon’s service though, even if your goal is just to take advantage of the Kindle Fire’s integration with Amazon services, customers also get free 2-day shipping on anything Amazon sells. The video streaming might not be the biggest money maker in the world, but the associated shipping benefit has a tendency to make impulse purchasing far more appealing. This translates into more regular profits as well as customer loyalty.
Compared to that, it is hard to imagine a huge desire on Amazon’s part to start attacking Netflix on their own terms. For the moment, at least, video distribution appears to remain a relatively small part of the company. The Kindle Fire is obviously meant to change that and it does a good job of showing off the content, but the day when physical goods are less important to the company than digital sales has yet to arrive.
So, clearly the Kindle Fire was destined to be a big thing from the moment it was announced. In addition to being a part of the bestselling Kindle line, the pricing alone would have been sufficient to make people sit up and take notice. Not many people expected anything less than $250 before the press conference, especially not a full 20% less. It seems that even Amazon wasn’t expecting how much attention their new tablet would get them, though.
Recent analyst estimates have indicated that since pre-orders began on the Kindle Fire, currently scheduled to begin shipping by November 15th, as many as 50,000 units per day have been sold. On the first day alone, as many as 95,000 pre-sales are believed to have occured. In light of this, Amazon CEO Jeff Bezos has announced that he has dramatically increased the number of units ordered for this year’s production. Even he apparently wasn’t quite ready for the splash being made.
In addition to the fact that the Kindle Fire is priced so impressively competitively, seeming to have single-handedly caused a drastic drop in Android tablet prices over the past few weeks, the company has brought a lot to bear on the new product to make it appealing for customers, new and old alike. While the obvious connection to the other Kindles exists, this is not primarily intended to serve as an eReading device. The Kindle App still works well, and the color screen will allow for a large variety of content that has as yet been unable to join in on the eReader fun, but there is a lot more going on.
Amazon Instant Video, for example, will probably serve as the greatest draw for most people. While the new tablet will only have 8GB of storage space onboard, the Android operating system included has been highly customized to allow the greatest possible integration with Amazon’s web services. This means that if you have a wireless network handy, Amazon will be able to bring you any video content you have access to at a moment’s notice. They’ll even save your stopping point for later if you set something down for whatever reason. This service has been undergoing fairly constant expansion in recent months with tens of thousands of new titles being added as deals come together with new providers. A fair percentage of this video content is even freely available with Amazon Prime subscription, a free month of which will accompany every device.
Given how appealing the media consumption angle is likely to be for customers, it is not at all surprising to see how hard Amazon is pushing the Kindle Fire. While some analysts are convinced that they are losing as much as $10 on every tablet sold, creating the sort of long lasting customer relationship that this has the potential to form can only be good in the long term. It might not be poised to overthrow the iPad any time soon, but the justifiable excitement over the newest Kindle is hard to ignore.
While it does other things as well, in a lot of ways the Kindle Fire seems to be intended to do for internet video what the Kindle eReader line has done for the eBook. While Amazon hasn’t quite got the content of, say, Netflix, they’re doing a great job of building up the lists in preparation for the launch of the new media tablet. Deals have been made with the likes of Fox, CBS, and others to offer a selection that will cater to practically any taste. The big trick is to get people interested in buying.
In order to ease customers into the experience, new Kindle Fire owners will be getting a month of free Amazon Prime membership. Now, in addition to the well known benefit of free two day shipping on almost anything Amazon.com sells for the duration of a Prime membership, everybody with said membership get to stream a fairly large segment of the Amazon Instant Video library for free any time they want to. It isn’t the whole collection by any means, but there’s been some good stuff there.
Now there is even more. Amazon has arranged to make a large selection of popular PBS titles available as part of the Prime package. This will include Frontline, Antiques Roadshow, Julia Child’s The French Chef, and a great deal more. All told, over 1,000 new episodes will show up over the next couple months, bringing the general total of this free streaming category to over 12,000. PBS has declared that this is part of a larger overall strategy to bring their programming to anybody who wants it whenever and wherever they want to experience it.
Obviously this works out well for customers. Freely available content is nice and it will give people a chance to assess the value of the Amazon Prime program on an individual basis. For Amazon it’s even more useful since it gives them an opportunity to impress. They’re reportedly selling the Kindle Fire for a slight loss on every unit, which means that money has to be made through other avenues besides hardware. Amazon Prime membership is one of those. This means that the company has every incentive to make the service worth the $79 annual fee. As most people who have used this service come to realize, it tends to be. It also lets people test out their own situation with streaming video in terms of connectivity and reliability. Nobody wants to be stuck spending money on video without knowing if they will actually be able to watch it. The trial is good news for all involved.
It’s likely this won’t be the last we hear about expanded video content in the next few months. That includes both Prime and regular content, of course, but the service is clearly poised to expand. With the recent dissatisfaction with Internet Streaming giant Netflix, it’s a good time to be presenting customers with an alternative opportunity. If you’re a fan of this sort of technology, it’s something to keep an eye on around and immediately following the Kindle Fire launch.
Amazon has just announced a large increase in the number of titles available through their Instant Video service, giving customers access to over 100,000 Movies and TV Shows. Amazon Prime members can access over 9,000 of those selections at no extra cost beyond their existing membership fees. While this is of course a good move in general, it works even better with the knowledge of a video-focused Kindle Tablet right around the corner.
There is some fairly good evidence to support the theory that Amazon is getting ready to try to do with video what they already accomplished in eBooks with the Kindle. Even if you leave aside the rumors of the Kindle ‘Hollywood’ Tablet, supposedly being produced for late 2011/early 2012 with lots of processing power and a larger screen than most tablets, the support structure is getting pretty large. Already you can access Amazon Instant Video via many HDTVs, set-top boxes, BluRay players, TiVos, and more, even if you don’t like to watch video on your PC. Like with the Kindle, once you purchase something you can access it through any device registered to your account. For the most part this is even true of the Amazon Prime selections.
Up until now, the video library has been rather thin. It was clear that Amazon was simply testing the waters and no real threat to any of the more established names in the field. Now, however, things are getting more impressive. You have a fairly good movie selection, admittedly heavily weighted to older titles (though not so much as was the case previously), and access to many TV shows within a day of airing.
Does this mean that Amazon is poised to shove Netflix out of the way and step into a well-deserved spot on top? Not really. By all accounts Netflix hasn’t even really noticed them enough to consider it real competition yet. Who knows what might change in the future, though, with Netflix customers quite vocally unhappy about the handling of recent price hikes due to a jump in operational costs. It seems like just about everybody is trying to jump on the video streaming bandwagon right now, which means lots of competition but also lots of potential for a well-planned and well-supported endeavor.
With the upcoming Kindle Tablets, Amazon is in a highly advantageous position. Not only can they advertise hardware optimized for video streaming and integrated directly into existing Amazon.com services of all sorts, but a simultaneous release of an Instant Video for Android App would earn them sales space on the vast majority of competing Tablet PCs.
Such an app would have to be something of an inevitability both because of the choice of OS for the Kindle Tablets and the fact that Amazon’s main goal seems to be harnessing media distribution rather than sales. No need to completely close off the competing hardware if you are making your money elsewhere anyway. The Kindle platform has given them a solid grip on the eReading market by being device-independent. I think we can count on Amazon to have learned from their own success.