Business Matters: Why Amazon Wants to Move Into Your Living Room

More than half of Americans surveyed by Edison Research and Triton Digital say their television is connected to the Internet.

Fact No. 1: More than half of those surveyed by Edison Research and Triton Digital this year for their Infinite Dial report said they owned a connected TV.

Fact No. 2: The market for connected television hardware was an estimated $197.6 billion in 2014, according a report released in March by Markets and Markets, which forecasts that figure will be $357.2 billion by 2020.

Fact No. 3: Until this week's introduction of the Amazon Fire TV, the Seattle online retailer's share of the connected TV devices market was exactly zero.

As consumers shift how they consume entertainment, Amazon has been watching how companies such as Microsoft Corp., Roku, Google Inc., Sony Corp. and Apple Inc. have succeeded in selling devices that allow people to stream music, movies and games to their TVs via the Internet, bypassing traditional cable service. Indeed, few know better than Amazon how well these devices sell since the company, in its capacity as the world's largest online retailer, has sold many of these devices.

Amazon acknowledged it had competition, helpfully giving shoppers a comparison chart between the $99 Fire TV and Roku 3, Apple TV and Google's Chromecast. (You'll need to scroll down the page to see the chart.) Its users gave more objective reviews of Fire TV, awarding the device with three out of five stars as of late Thursday afternoon. Many praised its speed and voice search function. Others knocked the Fire TV for not being able to search content on third-party applications such as Netflix, whose streaming video service is a competitor to Amazon's Prime Video service.

What does this mean for music? It's incrementally good news because Fire TV is yet another way for people to listen to streaming music. Amazon announced a healthy lineup of music apps, including Internet radio (Pandora, iHeartRadio, TuneIn), music video (Vevo, YouTube, Vimeo) and live concerts (Qello, EllloConcerts). It also plans to lets users access their Amazon MP3 library, a feature that the company said is "coming soon." Eventually, Fire TV could host an on-demand music subscription service that Amazon is working to build.

"We're excited to continue our relationship with Amazon and be able to extend our reach to even more consumers through Fire TV's simple and affordable in-home platform," Clear Channel's president of digital Brian Lakamp, said in a statement.

For Amazon, Fire TV gives it a physical seat in the living room, a platform for serving up digital entertainment in a way consumers are increasingly demanding, via a set-top box instead of a cardboard box.