Fire TV Stick Basic Edition shows just how much Amazon subsidizes the regular Fire TV Stick

Amazon released the Fire TV Stick Basic Edition a couple of days ago, making Fire TV hardware available in over 100 new countries for the first time. The Fire TV Stick Basic Edition takes the existing 2nd generation Fire TV Stick but replaces the Alexa voice remote with the non-voice remote that was included with the original 1st generation Fire TV Stick. Even though the Basic Edition package includes a cheaper remote and fewer features, at $49.99, it’s $10 more expensive than the $39.99 regular Fire TV Stick that comes with An Alexa voice remote. That shows us just how much Amazon subsidizes the regular Fire TV Stick and here’s why.

Subsidizing the Fire TV and Fire TV Stick means that Amazon sells these devices at a lower price point because they expect to continue to earn revenue after the device is purchased. That post-purchase revenue comes from numerous sources, like selling movies, TV shows, apps, and games, as well as displaying ads. This is how Amazon managed to introduce the original 1st generation Fire TV at $99 when analysts estimated that it had a manufacturing cost of $93.

The Fire TV Stick Basic Edition does not provide Amazon with the same post-purchase revenue potential, which is why it costs more for an inferior device. The main interface on the Basic Edition does not consist of movies and shows to entice you to spend money, like the regular Fire TV Stick. It does not even have a universal search feature to uncover additional content. Instead, the interface is just an app launcher and users must launch a streaming service app, like Amazon’s own standalone Prime Video app, to view content.

I know some of you reading this are thinking that’s exactly what you want from your own regular Fire TVs and Fire TV Sticks. A simple grid of apps, like the ones you’ll find on countless generic Android boxes from no-name manufacturers, certainly has some advantages, but what the Fire TV Stick Basic Edition shows us is that simplicity comes at a cost.

Back when Amazon was selling the 1st generation Fire TV Stick with a non-voice remote for $39.99, they introduced a new bundle that packed the same 1st generation Fire TV stick with a voice remote for $49.99. Since swapping in a voice remote increased the price by $10, we can estimate that a Fire TV Stick Basic Edition with a voice remote would cost at least $60. That tells us that the regular Fire TV Stick with a voice remote that Amazon sells for $39.99 to US customers is subsidized by at least $20.

I say “at least $20” because even at $49.99, the Fire TV Stick Basic Edition is likely also being subsidized. The purpose of the Fire TV Stick Basic Edition is not to sell streaming hardware at a profit. It is surely being released to sell the new global Prime Video subscription service, which in turn’s purpose is to sell Prime membership, which in turn’s purpose is to sell paper towels, and so on. Even though the Fire TV Stick Basic Edition doesn’t have as high of a post-purchase revenue potential as the regular Fire TV Stick, it’s still a part of Amazon’s interconnected web of products and services.

As a guy who’s just here to tinker with gadgets and write about them, the economics of Fire TV devices and a company like Amazon are way over my head. I’m just saying that the seemingly strange price of the Fire TV Stick Basic Edition is a clear example that there is a lot more going on with the Fire TV, and most other streaming devices, then simply a manufacturer making a device and selling it for a profit, like you might think.

Even Roku, which many think of as a “neutral player” since they don’t have a content store of their own, now makes only 19% of their profit from hardware sales. To stay competitive with hardware pricing, streaming devices need to be subsidized because nobody is going to pay $60+ for a 1080p streaming stick.

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28 comments
  1. Carlos Mahns says:

    Maybe the non-voice is because there are selling in countries with no english language, so it is of no use. Just an opinion.

    • Richy says:

      They’ve brought out the basic addition as they will now be able to sell more prime TV shows etc in countries where if you had a fire TV stick from the USA for example, but lived in Canada, you can’t access prime.

    • Eric says:

      The regular one has always been sold in germany. And it understands german, as well as Alexa there speaks german too.

      But yes, Amazon can’t do it all. They have to focus on a few major markets. These seem to be the US, the UK and germany. Those are the ones who get all the devices, subsidized, who have prime for years with all sorts of add on services and where they offer Amazon Fresh, Dash Buttons and such too.

      The Fire Tv is just part of a larger environment. Amazon wants americans, brits and germans do be, at some point, a customer of Amazon. Only of Amazon. No matter what. Amazon plays their music, talks to them, sells and delivers what they eat, wear,… and many other, ever growing services. When you think about it that is rather genius.

  2. clocks says:

    I’m actually surprised Roku doesn’t make more money off their hardware, since they always seem to be peddling vastly inferior spec’d, dated stuff. I’m pretty sure half their devices still only come with 512meg of ram, and 256meg of storage. But I guess that is the user base they have targeted, rather than the power users.

  3. Ike says:

    The point of the post is that the price (on the surface) doesn’t make sense. Not that there is no voice remote.

  4. Ulises A. Rodriguez, Ph.D. says:

    Please Elias could you tell us, what are these 100 countries, where from now on and for the first time, the FireTV hardware will be available?

    Could you post an Amazon.com link?

    • AFTVnews says:

      The list is here.

      Fire TV Stick Basic Edition works with available Prime Video content in:

      France, Belgium, Monaco, Italy, San Marino, Vatican City, Spain, Canada, Mexico, Australia, Brazil, Aland Islands, Albania, Andorra, Anguilla, Antigua & Barbuda, Aruba, Barbados, Belarus, Benin, Bermuda, Bolivia, Bosnia and Herzegovina, British Virgin Islands, Bulgaria, Cambodia, Cayman Islands, Chile, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Dominica, Dominican Republic, Ecuador, El Salvador, Estonia, Finland, French West Indies – Guadeloupe, French West Indies – Martinique, Gabon, Georgia, Ghana, Gibraltar, Greece, Grenada, Guatemala, Guyana, Haiti, Honduras, Hong Kong, Hungary, Iceland, Ireland, Jamaica, Kenya, Latvia, Lesotho, Liechtenstein, Lithuania, Luxembourg, Macao, Macedonia, Malta, Montenegro, Montserrat, Namibia, Nauru, Netherlands, Netherlands Antilles, New Zealand, Norway, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Serbia, Slovakia, Slovenia, South Africa, Sri Lanka, Suriname, Sweden, Switzerland, Taiwan, Tanzania, Thailand, Togo, Trinidad & Tobago, Turks & Caicos, Ukraine, Uruguay, Vanuatu, Venezuela, Vietnam, Zambia

      • Richy says:

        Well with the Alexa version, I have 3 of them from the USA and live in Canada. I can’t access prime. I just bought a friend one of the basic versions and it allows you to select Canada as a country when registering but the USA/UK don’t.

  5. HeyRadar says:

    I would pay extra for a Fire TV device that doesn’t have the “Amazon” interface. It’s one of the main reasons I never tell anyone to buy a Fire TV device unless they have Amazon Prime.

  6. Richy says:

    They’ve brought out the basic addition as they will now be able to sell more prime TV shows etc in countries where if you had a fire TV stick from the USA for example, but lived in Canada, you can’t access prime.

  7. J Jeans says:

    Since the launcher is different, and basically an app drawer, does that mean that prime video is a standalone app?

    Any chance to get screenshots of the new basic launcher?

    • The Brain says:

      It’ said that way:

      “Instead, the interface is just an app launcher and users must launch a streaming service app, like Amazon’s own standalone Prime Video app, to view content.”

    • Daniel Binder says:

      That is correct, now it is just the same app you get in a cell phone.

  8. Andy says:

    For me if this by passes all the crap on the start up screen , it’s worth paying extra. If we could have a picture if the app drawer that would be really helpful.
    Much like you can buy Kindles and phones with or without the Amazon ads ,they should have the same option for the Fire tv devices.

  9. Andy says:

    For me if this by passes all the crap on the start up screen , it’s worth paying extra. If we could have a picture of the app drawer that would be really helpful.
    Much like you can buy Kindles and phones with or without the Amazon ads ,they should have the same option for the Fire tv devices.

  10. Rich says:

    I now know why Amazon were reluctant to extend to other countries, lack of revenue, example since stick release you only got to sell 1 tv app .99c and you make top 10 paid Apps overall, so far I see this in France and Italy lol
    miniscule compared with other markets, as they sell more sticks you will prob see minecraft being knocked of top sport with tv apps

  11. Michael says:

    I thought the same thing about the price of the stick. But I also saw that the price includes an AC adapter for each and every country on the global list. And there are some odd-ball plugs out there on this planet. At least there are only 2 frequencies and both convert to 5V DC easily.

    Also, it looks like secured delivery to each of those countries. Not a big deal to Canada, but Eastern European and Central Africa a bit tougher and islands all over the globe are all air mail. All with Customs and regulations that can be a nightmare. My bride worked for FedEx and it’s Not cheap. Ten bucks up-charge is not going to cover what some of those shipments will cost Amazon.

    It’s easy to sit in the States and judge. But I’m sure the price gone over many times in the Amazon HQ. And with all the sales on eBay, I’m sure they came up with the lowest price to capture those sales back on Amazon.

    • Eric says:

      How about this:

      this new basic one costs 60 € on amazon.fr, the Alexa one with voice remote costs 40 € in germany. Ofcourse it will only speak german, but even with a useless voice remote and extra shipping fee of 5 €, a french customer still saves 15 € if they order the Alexa stick from germany.
      It comes with an Europlug anyway, so it will just fit in french power sockets as is and ofcourse conforms with all regulations in france, as it does in germany, since the EU is a single market, so ofcourse with no customs too.

      Nobody talks about shipping from the US, even in belgium, where germany is always just a short car ride away, it is the same. This is as if the Alexa stick is only sold in California, but not in Arizona and even more so, in Arizona you only get this basic one for the 1/3 higher price.

  12. jfc says:

    Regarding some of the questions above, one thing I’m wondering is what would happen if you bought the basic Fire TV stick and then tried to use it in the U.S.?

    Would you be able to access the full Amazon Prime Video library for the U.S. thru the device, or only the “crippled” international version of Amazon Prime Video with vastly limited content?

    I notice in the pull-down countries box for the basic stick, that delivery to the U.S. appears to be available for that device. (The U.S. is among the countries listed). But what exactly you’d be able to do with it (apart from not having Alexa, etc.,), I’m not really clear.

    I too would like to see what its home screen looks like.

  13. Max says:

    The voice remote doesn’t cost $15 more to make, closer to $1.

    And the non-voice version is superior if you’re not using the voice feature.

    • clocks says:

      Not saying you are wrong, but how is the non-voice remote better? Personally even ignoring voice, I believe the voice remote has a better form factor and feels higher quality(i.e. more solid).

      • Jiggypuff says:

        Its ergonomics are better, doesnt make loud sounds when pressing buttons, feels more solid, lasts longer on a set of batteries, isnt listening to every word you say, etc.

  14. juanpa says:

    This is a totally unrelated question but after search on internet and this site I can’t find an answer.
    Which software update added Spanish as a System language option?

    I have a Fire TV Stick 2nd gen on the latest software. It has Spanish as an option.
    I also have a Fire TV Stick 1st gen. This one has updates blocked but software version is last June. Only English, German and Japanese as language options.

    Is it because not on latest update or is because it is 1st gen stick?

    Thank you.

  15. Damian says:

    Also, seems that voice remote does not make any difference to the device. The device does not support native Alexa, hence no need to include the remote.

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