"It's an evolution of Amazon's desire to be a widely accepted content provider," Kay said.
Amazon will still need access to the data pipes operated by the likes of Comcast, Time Warner and Verizon, and those companies bundle their own video content with their Internet services, making them rivals to Amazon, Kay noted. Amazon may have to cut deals with those Internet providers to assure a good quality of service.
Amazon is a bit late to the streaming device market, but more important is whether it can offer a compelling package of services, said Bob O'Donnell, principal analyst at Technalysis Research.
The TV market is being turned on its head, with people accessing content through set-top boxes, tablets and streaming boxes. With Fire TV and its Kindle Fire tablets, Amazon is turning into a strong multi-device content provider, O'Donnell said. Its challenge will be to understand the type of content people want to watch, and how they want to watch it.
"Is Amazon a big enough player to drive movement in that area? That will be interesting to see," O'Donnell said.
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