Why Amazon faces an uphill battle in streaming video

Donald Iain Smith | Flickr | Getty Images

Amazon is in for an uphill battle if it's really serious about owning the living room.

The e-commerce giant is expected to take its media offerings to the next level on Wednesday by introducing a set-top box that will make streaming Web content to the TV seamless.

Read MoreAmazon to launch video box next week

But the company is going to have to do something drastically different if it's going to take on companies like Apple, Google and Roku, all of which already have similar products on the market, analysts said.

"It would have to be cheaper than everyone else, or have specific content that no one else has," said Carolina Milanesi, chief of research at Kantar WorldPanel.

Read MoreHow Amazon got away with jacking up the price of Prime

Tech Yeah! Streams from the Amazon?

"I don't know that they can give consumers something that they can't get anywhere else. ... Hard to see where the return on investment is for them."

Read More Amazon gets its TV box ready, again

There's certainly no shortage of competition in this emerging space.

Apple sells its Apple TV for $99, which allows users to stream content from various content providers including HBO GO, ESPN and Netflix. It also can stream radio and pretty much any content you can play on your iPad or iPhone with its AirPlay feature.

But if Amazon thinks it can sell a similar device at the same price point, it's mistaken, Milanesi said.

"I think even $99 is too much of a barrier for consumers unless its $99 and then you get everything else (access to Amazon's Prime content) for free," she said. "I don't see why they would do that, though. What's in it for them?"

Amazon said last Friday that it has , which makes sense considering it just raised its Prime membership $20. It wouldn't make sense for the company to increase the cost of Prime, which gives members exclusive access to its library of content along with two-day shipping, and then start giving content away for free, Milanesi said.

"At the end of the day, there are a lot of consumers who don't think of Amazon in this way," Milanesi said. "Obviously Prime is important from a shipping point of view, but now you're raising the pricing and then giving away part of the product to everyone else. Where is the value?"

Yahoo in talks to buy Network Distribution News for $300M: Report

One possibility is the company could be chasing more advertising dollars, and more knowledge about its customers, said James McQuivey, an analyst at Forrester.

McQuivey said that he expects Amazon to roll out some sort of streaming device, either a box or a console, along with a gaming controller and offer users a tiered system of paying for content.

"If Amazon says we have Netflix, but we also have all of this video collection that we are going to give you for free that is ad supported, it could give them some traction," he said. "Their long-term goal is they are not interested in competing with cable companies, but using your TV viewing to learn more about you and offer you a TV-based commerce experience."

But the only way the company can make that happen is if the price is right, McQuivey said.

If Amazon does launch a TV box, it won't just be competing with the more expensive Apple TV, it will also have to go up against competitors who are aggressively pricing similar products.

Roku also sells four products with varying streaming capabilities ranging in price from $49.99 to $99.99. Its two cheapest devices consist of a streaming dongle, which only works with HDTVs, and a set-top box, which basically has the same capabilities but works with almost any TV.

Both of these devices enable the user to stream more than 1,000 entertainment channels, including Netflix and Amazon Instant Video. However, only the dongle has the capability to broadcast content to the TV directly from Netflix and YouTube apps.

The company's two more expensive devices, which are $79.99 and $99.99, are both set-top boxes and pretty similar in function, but the more expensive box only works with HDTVs and has a few additional features, including a faster processor.

Amazon's toughest pricing competition, though, comes from Google's $35 Chromecast.

The streaming device is a small USB-like device that plugs into the HDMI port of a TV and allows users to stream online content—including Netflix, Youtube, Hulu, Google Play movies and music—from their tablet or smartphone.

If Amazon wants to become a player in the space it's going to have to offer a product at a similar price point with more capabilities, Milanesi said. What those new features might be, though, isn't clear.

"I'm getting concerned they are getting into too many things and that they are losing focus," Milanesi said.

"The core question is what do they want to be? Is the business model changing that drastically that they are going to get into gaming and media? And if it's about getting more eyeballs for advertising, well, there's so much competition there I don't know what they would have that would be different from Google or Apple."

Amazon didn't respond to a request for comment.