Amazon’s Set-Top

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By now you’ve probably caught word that Amazon is reportedly developing a video streaming device of some sort that will debut later this year.

According to the Bloomberg report, the device will (unsurprisingly) provide access to Amazon’s own video store, and put it in competition with the likes of the Apple TV, Boxee, gaming consoles makers and Roku, which has just surpassed 5 million devices shipped in the U.S. Of course, some of these guys are also Amazon’s video partners.

But this is the over-the-top world we're talking about. Anything goes. It's anarchy. Today’s lovers are tomorrow’s enemies. Hold you’re your friends close and your enemies closer, and all that jazz.

While it doesn’t make a lot of sense for Amazon to roll a me-too product into a market that’s saturated with video streaming devices, the bigger question to me is what Amazon’s deeper strategy is here, other than ensuring that its video app/service is front and center every time the user fires up the device, essentially replicating the sort of brand and service integration it has achieved with Kindle Fire tablets.

Will Amazon be like Roku and Microsoft and also try to team up with cable operators by integrating their authenticated TV Everywhere services and possible their live TV offerings? Or will Amazon take the Intel Media route and try to become a “virtual” MSO that develops and offers its own subscription video packages?  

While a pay-TV partnership path would offer the least resistance, it would be a total yawner, given how many others in the market are already doing this. A virtual MSO model has the potential to be much more explosive. But it’s also the more expensive, riskier bet.

But given the pedigree of engineers that are reportedly running Amazon's set-top unit (ex-Cisco Systems exec Malachy Moynihan and engineers late of DVR pioneers TiVo and ReplayTV), it would seem that the focus won't be on striking carriage deals and all the complication and pain that would be associated with creating a virtual MSO.