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Amazon announces $99 set-top box

Amazon vice president Peter Larsen introduced Fire TV Wednesday, which will compete with Roku and Apple.Andrew Burton/Getty Images

NEW YORK — If Amazon has its way — and it did not become one of the country’s most valuable companies by drifting with the current — even watching home movies of your sister’s adorable children or a friend’s crazy cat will become marketing opportunities.

The company began selling a device Wednesday that lets consumers watch Amazon’s extensive video library and play a wide array of games on television sets.

“Amazon has a vested interest in making sure it is present at every moment of possible consumption, which is all the time,” said James McQuivey, an analyst with Forrester Research. “It wants to get into that television screen and start to build a relationship.”


Amazon Fire TV is part of a multibillion-dollar effort by the company to move from selling goods produced by others, which is traditionally a low-margin business, to presiding over the entire process of creation and consumption. Physical formats such as books, CDs, and DVDs are disappearing, replaced by downloads and streaming.

In books, Amazon has largely made this transition. It makes e-readers and tablets and then sells the content for them. Some writers produce their books exclusively for Amazon, happily living in the digital equivalent of a company town.

Video is much more competitive. Netflix, which began by renting the same DVDs that Amazon was selling, is the leader both in streaming video and creating original shows to feature on it.

“Streaming is the long-term future of video,” said William V. Power, an analyst for Robert W. Baird & Co. “Amazon needs to capitalize on that. The prize is controlling much of the living room and a big piece of the economy.”

Fire TV, which arrives after years of explicit rumors and intense speculation, costs $99. In addition to content from Amazon’s own studios, it offers programming the retailer licenses for an estimated 20 million Amazon Prime subscribers. Those customers pay up to $99 a year for a membership that includes videos and shipping.


Other Fire content will come from established players such as Hulu and Netflix. Yet another source will be homemade films. With a separate $40 controller, Fire TV can also be used to play games, including a version of the extremely popular “Minecraft.”

“We’re missionaries about inventing and simplifying on behalf of customers,” Peter Larsen, an Amazon vice president, said at a Manhattan news conference held to reveal the device.

Larsen, speaking on a stage outfitted to look like a living room, said devices from competitors, which include Roku, Google, and Apple, have three problems: It is too hard to search for content, performance is slow and unreliable, and the content is a closed system. He noted that Apple TV users could not get the full Amazon Prime experience.

Among the improvements and enhancements promoted for Fire TV: a voice search function that allows users to say a name like George Clooney or a genre like horror and see results instantly pop up.

Amazon is leveraging its position as a retailer to expand into new fields, something it has become very good at. “Because we’re selling millions” of set-top boxes already, “we hear what’s working and we hear what’s not working,” Larsen said. Jeffrey P. Bezos, Amazon’s founder and chief executive, was not present at the news conference.

Dave Limp, another Amazon executive, dismissed all the new and old companies that will be duking it out with Amazon in the consumer’s living room.


“We don’t go at it from the perspective of who you’re going to compete against,” he said. “We don’t think of this as a sporting event where there has to be one winner.”

But in a chart on Amazon’s site, where the company has already started selling the Fire TV, it made explicit comparisons with those competitors, whom it judged wanting. Amazon’s chart was immediately attacked for leaving out things that its competitors did better. For instance, Roku offers streaming sports, and Amazon does not.

Since set-top boxes give consumers an incentive to cut the cable cord, Fire TV also puts Amazon in the sights of Comcast, the country’s dominant cable system.

Consultants are already laying their bets. “The likely winners are Apple and Amazon, both of which offer entire ecosystems, are excellent at merchandising content, and are capable of subsidizing prices and making up the revenue elsewhere,” said Bill Rosenblatt, president of GiantSteps Media Technology Strategies.