Amazon is already a big name in the streaming business, with their line of Fire TV sticks, TV sets and Prime Video. In a special interview with Cord Busters, Amazon’s VP opens up about Fire TV’s future, and Amazon’s views on the UK’s public broadcasters and Freeview.
With over 150 million Fire TV devices sold, Amazon, alongside Roku, dominates the streaming hardware arena. But as the saying goes, with great power comes great responsibility – and the UK government is already looking into our broadcasters’ prominence (or lack thereof) on these American, commercial platforms.
Daniel Rausch, Amazon’s Vice President for Entertainment Devices and Services, visited the UK recently, and I had a chance to sit with him and talk about some of the company’s future plans for the Fire TV, as well as Amazon’s relationships with the UK public broadcasters (such as the BBC and ITV) and Freeview.
Here’s the full interview, which has been lightly edited for length and clarity.
The UK government announced recently that they’re planning to make device manufacturers give more prominence to the Public Service Broadcasters. So maybe they’ll make you put a shortcut button to BBC iPlayer on the remote, or just install all PSB apps as defaults. Is that something you’re willing to work with or even get ahead of?
These are great partners for us that you’re mentioning, the public service broadcasters. We believe in the mission of public service broadcasting, for sure.
Out of the box, Fire TV already shows the BBC and ITV hub in the application tray. Customers can of course customize that, but that’s exactly how it comes out of the box. So we look forward to continuing to work with them to make sure that they’re available for customers here in the UK.
I think the public broadcasters’ point of view is that the bigger companies can pay Amazon to have a button on the remote, or to be more prominent on the home screen, while they can’t afford that. So that’s why the government wants to step in, to make ITV Hub, All 4 and the rest more prominent.
We’ll have to wait to see what the government publishes, if anything, in this area. But I think the good news is that customers love that content and these are great partners for us.
So we see our position with that as working backwards from customers, and customers are interested in that content. Those are great sources of content for customers.
They’re already very prominent in our interface, so we’ll have to wait and see if there’s anything additional, but we’re really glad about our relationships with them today.
Then there’s Freeview, which is very popular here in the UK, but aerial reception can be problematic. So some companies are starting to stream Freeview channels over broadband, such as with Sky Glass and the new Virgin Media Stream box. Is that an area Amazon might step into, and stream live Freeview channels to Fire TV customers?
I‘ll take that idea back to the team. It’s an interesting one. Customers do want that full content experience, so what we want to do with the Live interface on Fire TV is to aggregate any of their channel content together.
So that channels that you get from a paid subscription, are aggregated right alongside anything that you get from PSBs [Like BBC iPlayer and ITV Hub], so I’ll take that idea back to the team.
On Fire TV Edition TVs [Those are television sets that have the Fire TV interface built in, and also have a Freeview tuner -O.G.], if you go to the Live tab, you’ll see a banner for Freeview right there in the interface above the fold.
So it’s one of the first things you see. You tap in there to get the Fire TV Freeview Play experience.
[Currently, Freeview Play is only available on Fire TV Edition TV sets – and not on portable devices like the Fire TV Stick or Cube. -O.G.]
As Fire TV devices get more and more features, they’re also getting more complex. My mother is using a Roku device because it’s simpler. How do you innovate without making things too complicated?
I think that there are different ways customers want to engage with content.
We do need to make sure that it’s very easy for customers to find their apps – if that’s how they imagine they want to go look for their content.
And that might mean that they’ve got other sources of content and then maybe one or two applications that they’re very familiar with and that’s the main way they want to dive into their content.
And so the top row of Fire TV is six applications. It’s customizable by the customers – you can have your few apps there as well, but I do think that the overarching trend and what we observe over time from customers is that we’re moving from an era where it’s one or two to an era where there are many different content sources.
And we just see an increasing amount of engagement with the Fire TV ‘Home Experience’, which is what we call that first page.
You get back to that with the home icon, and over time we see customers engaging with it more and more, because I think customers do get confused about those heterogeneous content sources.
It is exactly like how many apps we all used to have on our phones and how we had to organize them. How many apps do you have?
Right, too many of course, that’s the answer we all have. But what if you weren’t sure what each app did?
Imagine a world where you weren’t sure which app was your email and you had to tap in and out of each one to try to find, where do I send an email again?
That’s the world that we know that many customers are experiencing. And so we’re bringing the content forward, so that your most recently watched content is right there.
For example, movie recommendations by category or across different providers are right there at the top of the interface. We know that that is going to be helping customers over time.
And you’ll continue to see [Fire TV’s] watchlist get better over time. With our previous update, the watchlist became a few clicks away from the top of the interface. And so customers weren’t finding it as well.
So the new update actually brings the watchlist and content search closer to the top. Because we know that customers want to be able to aggregate a watchlist across providers, so the new “My Stuff” button does exactly that.
In terms of the Fire TV hardware, are there any major innovations left? Because it feels like the Fire TV Stick 4K Max was a bit of a minor update. Maybe these sticks already have everything we want.
The Max is a great way to make sure you’re ready for WiFi 6. So I think you’ll continue to see that we wanna make sure we offer strong connectivity as part of our lineup.
And you’ll continue to see enough processing horsepower to create a really fluid experience. We definitely hear from customers that Max is our most powerful stick yet. It’s a very fluid and pacey experience.
The importance of voice is obviously big for us. We do see that customers actually engage six times as much with voice on a Fire TV Cube.
And they’re using that for everything – for Alexa around the home, to answer questions, to ask about the weather and also, of course, to navigate the content experience. So you’ll continue to see that as part of our hardware story as well.
And then, of course, TVs. I think building the Fire TV experience right into a full range of options on TVs is another key part of what you’ll see from us, from a hardware perspective.
I think part of your question is not just about hardware, it’s also, what else could a TV do for a customer?
We continue to believe that TVs aren’t really smart enough for customers yet. It’s already true that customers’ purchase intention for a streaming media player goes up over two times when they have a Smart TV already, versus an older TV that’s not smart.
That’s not exactly what you would expect. You’d expect they already have a Smart TV, so why do they need to buy a different experience for that?
And the answer is that it’s not smart enough. Most customers are dissatisfied with the Smart TV experience that came out of the box. And that’s why the purchase intention is so high for a replacement experience.
And we believe that a key area of innovation in hardware and software is just to continue to make TV smarter for customers.
Do you see the TVs with Fire TV built-in being the future, with Fire TV sticks being kind of the gateway drug to get people to know the system and the software?
I think about it as just a complete set of selections for customers. We do see that customers already familiar with the Fire TV experience do purchase our TVs at a higher rate than people not familiar, but that’s sort of what you would intuitively expect.
It means that that’s good news because they’re satisfied with that experience. They’re seeking more of it.
So I think our strategy is to work backwards from customers like we always do and to make sure there’s a complete set of offerings for customers. Maybe they want to update a TV and they want the most affordable way. Start with a £29 stick.
Maybe they want to upgrade the main TV in their home. So we want to make sure there’s a complete range of options for that customer as well. And everything in between.
Speaking about Fire TV Edition TVs – they’re big in the US, but still kind of low-key in the UK. We haven’t had a lot of models released here. Is it an area you’re looking to expand?
Yes, you’ll continue to see more and more partners adopting Fire TV as the core operating system of their television.
We’ve released some great products to date in the UK with JVC, Bush and Xiaomi, so stay tuned for more there.
Do you see any differences between the customers in the UK and the US, in terms of streaming and being open to using the Firesticks?
No, I don’t think so. I think we see the same overall trend, which is that customers love the choice that they can get from the world of streaming media.
And any variation is drowned out by the overarching trend, which is increased engagement.
We’re seeing customers stream billions of hours per month on Fire TV, across the full range of content – movies and shows, but also all those habits that customers picked up during the pandemic, like engaging with exercise content and education content.
That’s continuing even now that things are opening up.
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