Best Buy and Amazon announced an exclusive partnership this morning that will have Best Buy selling Amazon Fire TV Edition smart televisions in its stores, with “more than 10” Fire TV Edition models coming soon from Toshiba and Best Buy’s own Insignia brand. The new TVs will be sold in Best Buy stores, at BestBuy.com, and at Amazon.com, where Best Buy will be selling items as a third-party seller for the first time.
While Amazon and Best Buy are often seen as rivals, Best Buy has been selling Amazon Kindle eReaders, Fire tablets, and Alexa-enabled smart speakers in its stores for years.
What’s a bit surprising is that it looks like Best Buy isn’t just going to start selling Insignia smart TVs with Amazon Fire TV software. The company is also said to be ditching Insignia TVs with Roku software.
Up until now Best Buy had used Roku’s software for its smart TVs. You’ll still be able to find TVs with Roku’s user interface from other companies in Best Buy stores. And Best Buy will continue to sell Roku boxes and sticks for people that want to add the user interface to their existing TVs.
But this is still bad news for Roku (and good news for Amazon) for a few reasons. First, Best Buy’s Insignia TVs are among the cheapest the store offers. So while they may not be the best smart TVs that money can buy, they’re often attractive choices for value-conscious shoppers.
And second, most 1080p and 4K TVs that ship these days already have some sort of smart TV functionality built in, reducing the need to buy a 3rd-party box or dongle.
Sure, some customers who prefer Roku to Fire TV may buy a new Insignia TV and a Roku device that they can plug in. But I suspect that most will just go with the built-in smart TV functionality.
After using an Amazon Fire TV Stick for the past few years, I recently made the switch to Roku. While the Fire TV operating system is more powerful in some ways (you can sideload apps like Kodi), I’ve generally found that it takes longer to boot and it currently lacks an official YouTube apps. Google Play Movies also doesn’t work with Amazon’s Fire TV platform.
While I use an Amazon Kindle to read eBooks and an Amazon Fire HD 8 to read digital comics and watch videos, among other things, I’ve decided that Roku’s platform is a better fit for the TVs in my living room and basement. Your needs may be different. That’s one of the nice things about having multiple platforms to choose from.
But investors seem a bit worried for Roku: the company’s stock price dropped by almost 10% today, after the Wall Street Journal reported that the Amazon/Best Buy deal meant the end of Best Buy’s Insignia-branded Roku TVs.