When Will Amazon Give Us TVs For Free?

  • by , Featured Contributor, February 24, 2022

The following is an updated version of a post that was previously published in an earlier edition of Media Insider.

Everybody seems to be getting into the TV business these days -- the TV device business, that is, not just the business of making, broadcasting or streaming shows and movies.

Last September, Amazon announced that it was now manufacturing its own branded smart TVs, with lots of key Amazon technologies -- like voice assistant Alexa and streaming service Prime -- built in with tight integrations.

Last October, Comcast launched its own smart TV, sold at Walmart and made by Hisense, and preloaded with apps including its own streaming service Peacock.

Given how important it is for media and ecommerce companies to own the digital home “operating system,” it seems it can’t be very long until Amazon just gives us its TV for free as part of a bundled service of Prime and others of its products.

Why do I say this?



All you have to ask yourself is how much money a company can make if it owns the outfitting, computing and communication needs of the digital homes in the U.S. and around the world. Answer: an awful lot.

Let’s add up some of the potential components. Today, Roku makes north of $35 per user per year from its streaming device clients, the number of which is growing almost 50% year over year. Comcast makes about $340 per household per year from its telecommunications and video services. Amazon’s Prime generates  $119 per user per year, and Prime members spend $1,400 per year with Amazon, more than twice as much as non-Prime members. Apple Music and Spotify’s premium service generate more than $100 revenue per user per year. No shortage of money available from core TV-related services.

Now, let’s get creative. Maybe a free TV can give you an inside track to sell home security services. Amazon’s Ring Alarm costs $200 to $340 for the equipment and $10 per month for monitoring. Smart thermostats? Home robots? Smart picture frames? Smart electricity management and power back-up? The list is endless.

For sure, you can make a lot of money in digital home products and services, but controlling the TV provides critical leverage to getting it.

Here’s why: TVs are ubiquitous in homes. Everyone has one, and the average household member in the U.S. uses it for more than four hours per person per day. TVs are the centerpiece for an enormous amount of high value, high margin media usage, and they could become gateway hubs for even more high margin, home services usage. Plus, on the manufacturing end, they are becoming increasingly commoditized, with very little margin for their makers.

It's natural to give away the razor to sell blades. Amazon TVs will go for between $350 and $500. Given the many hundreds and thousands of of dollars of annual revenue that are available ---and just on the fact that SVODs spend about $200 per subscriber acquisition alone -- it totally makes sense for a company like Amazon to fully subsidize the cost of its TVs for multiyear, multiproduct contracts. When Apple launched the iPhone 3G in 2008, AT&T paid for more than one-half of the total purchase price for a service contract.

In my mind, it’s not if Amazon will give us a free TV someday, it’s just a matter of when. What do you think?

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