Amazon, Too, Is Working on a TV: Report

Amazon, like Apple, is said to be working on a TV offering. It could increase access to its original programming, video content and apps.

Amazon competes with Apple for tablet sales, app downloads and soon, it's rumored, smartphone market share. If rumors hold, it'll soon also compete for television sales.

Bloomberg Businessweek, citing several people familiar with Amazon's plans, reported April 24 that Amazon is planning a set-top box that will plug into a TV to provide direct access to online company's growing video offerings.

Amazon already offers instant streaming movies and videos that consumers can rent or buy. It has negotiated deals to exclusively offer the streaming rights to popular shows such as Downton Abbey and, through Amazon Studios, has been creating original content.

On April 22, it announced that its new Amazon Originals TV pilots were eight of the 10 most streamed episodes across Amazon Instant video over the weekend.

The pilots—which include stars such as John Goodman, Jeffrey Tambor and Bebe Neuwirth—are being voted on by viewers, and Amazon plans to develop the most popular ones into full series.

Netflix, which has struggled to keep an audience that can just as easily turn to Amazon, has scored a homerun in creating original programming. Its House of Cards series, starring Kevin Spacey, helped Netflix add 3 million new subscribers to its service during the first quarter and beat Wall Street forecasts for the quarter.

Netflix CEO Reed Hastings, in a quarter letter to shareholders, said the popular show had cast a "halo effect on our entire service."

Amazon is no doubt well aware of that halo, deep into the process of securing its own.

"For the past year the Amazon Studios team has collaborated with some of the best actors and writers in Hollywood to produce top-quality show. Now we've handed the remote to our customers to hear what they think," Roy Price, director of Amazon Studies, said in a statement.

The Amazon pilots can be viewed on the Amazon Originals Website or through an Instant Video app for the Kindle Fire HD, Kindle Fire, iPad, iPhone, iPod touch, Roku, Xbox 360, PlayStation 3, Wii and Wii U, and other connected devices, offering a reminder of Amazon's reach, as well as its very connected user base.

Amazon recently announced plans to expand its Appstore to almost 200 countries. While the Appstore is currently a fraction of the size of Google's Play store, it's logging notable numbers. In March, according to a new report from app analytics firm Distimo, Amazon's top 200 paid applications saw 1.6 million downloads and gained $3 million in one-off fees.

(In both the Appstore and Google Play, games are the top apps.)

"The number of paid device downloads in Google Play is overall two times the number of paid downloads in the Amazon Appstore," Distimo wrote in the report, which it announced April 24. "Although if you zoom in on the application level, you can find examples of applications who perform better in the Amazon Appstore than in Google Play."

Analysts expect Apple to introduce a television—dubbed the iTV, by the press—sometime this year. Apple's Worldwide Developers Conference, kicking off June 10 in San Francisco, is one guess. While, in keeping with Apple's hardware strategies, the iTV is expected to be priced between $1,500 and $2,500, Amazon is expected to follow its own traditional strategy—price the hardware low, with expectations of making up dollars on software and other purchases.

Wedbush Securities analyst Michael Pachter told The New York Times that Amazon could offer a set-top box for $100 or less and include a free year of its subscription video service.

"I think this is a Trojan horse to get people to join [Amazon] Prime," said Pachter.