Another method of watching content is soon to arrive......Or is it??

is taking steps toward releasing a video-streaming device in time for the festive period , according to people briefed on the company's plans.

The set-top box, which would pit the online retailer against a host of established rivals, is a small device that resembles a Roku Inc. player and is similarly styled as a platform to run apps and content from a variety of sources, these people said. It would also serve as a delivery vehicle for Amazon's existing streaming video service—available as part of its Prime membership—which competes with Netflix Inc.

Why would Amazon do this? The Wall Street Journal lines out several arguments, 

This provides direct-to-TV hardware to enable Amazon’s OTT TV service to bypass the currentreach of secondary platforms (like game consoles) on which Amazon’s apps are preloaded.

I would counter this statement and that it is rubbish. As a consumer I have to go and buy another piece of hardware to receive content. Why? I am sure that Netflix identified this and decided to piggy back on the hardware manufacturers to increase the reach of the product. The results of this decision speak for themselves. Just ask incumbent pay-TV players how nice it would be not to have to subsidize their set-top boxes And that’s what this will end up being, a subsidy, as Amazon sells its hardware at break-even or below so that it can sell its services.

It could provide a physical platform through which Amazon can sell cloud-based gaming.

I would counter this statement and point out that you can do this on other hardware and does not need to be proprietary hardware.

Amazon could provide “a truly complete package of streaming sources…that would be compelling.”

With the exception of maybe Apple, every Every hardware and service vendor in the net-to-TV space seeks to offer a “complete package” of streaming sources. That’s not the issue. The issue is how creating a meta-service above this diverse set of content to help organize and improve the user experience (I’m thinking here of improvements in search and UIs). Roku has done well executing on this vision, and that’s what takes: execution. And let’s be honest: Amazon may allow in other third-party apps, but will most certainly preference its own content.

What do you think?? 

Me.... I thinkAmazon should toss the hardware idea and vigorously pursue a Netflix-like embedded app strategy. It must focus its efforts on differentiating its service from Netflix, not wasting millions on rolling and supporting a new iSTB. Keeping the video service tied in some way to the larger mass merchandising market vision is critical, and this was accomplished in part by tying the service to Prime membership (very smart move).