Amazon makes huge play to replace traditional cable box

The Amazon Fire TV Recast is seen in a promotional video. (Still frame: Amazon/Handout)

The National Cable Television Cooperative announced this week that Amazon had offered its more than 750 member cable operators the opportunity to purchase Fire TV hardware at a substantial discount.

Terms of the discount weren’t immediately disclosed, but the move by Amazon was clear: As customers move away from expensive pay TV bundles in favor of cheaper streaming options, cable companies are increasingly looking for ways to entice customers back to subscription television.

Comcast and AT&T have pivoted toward offering Internet-based linear streaming television by offering standalone X1 and AT&T TV boxes, each running a different operating system. But smaller, independent cable companies typically can’t afford to develop new products on their own — they rely on licensing deals or third-party partnerships, which can be expensive.

Amazon sees an opportunity to help these smaller cable companies offer access to thousands of streaming apps — including some that cable companies may be able to launch themselves if they can sidestep the cost of hardware.

“Having the option to purchase Amazon Fire TV streaming devices at a discount will help our broadband and cable operator members retain video customers by creating affordable options that do not rely on a traditional set-top box,” Rich Fickle, the president of the NCTC, said in a statement. “NCTC is committed to creating new ways for independent cable and broadband providers to delight customers by offering the products and services that today’s video and broadband consumers want.”

One way cable companies can do this is by bundling their existing streaming service — if they have one — with an Amazon Fire TV stick that they can offer to customers for little or no money. Another option is to offer an Amazon Fire TV stick for free in exchange for a customer signing a contract for broadband Internet or streaming TV service, similar to offerings made by Sling TV and Philo.

Amazon’s getting a good deal out of it, too: The more people they have locked into their ecosystem, the more data they’re likely to accumulate — and the less likely a customer is to switch to a device offered by a competitor.

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