More talk of an Amazon.com streaming device surfaced this week, with The Wall Street Journal reporting that its sources say a set-top box is likely to launch before the holiday season. Though we've heard rumors of Amazon's streaming box before, it's important for investors to know where Amazon stands in the steaming space and what its chances are of competing against streaming juggernauts Apple and Netflix .

Television, the final frontier
With its e-readers and tablets, Amazon doesn't sell devices to make money from the sale, but rather to make money on what they sell through devices. An Amazon streaming box will likely follow the same thinking.

An RBC Capital Markets equity research analyst estimates that Kindle owners purchase up to four times as many books as the average Amazon shopper. While that's just an estimate -- and can't be fully applied to other Amazon devices -- the idea of increased conversion rates through Amazon products is a real consideration for the company. With a set-top box, Amazon would likely be interested in selling more of its $79-per-year subscriptions to Amazon Prime. The service is similar to Netflix in that it offers television and movie streaming, along with some original content. But it differs in that a Prime subscription also includes free two-day shipping on orders from Amazon.com. To date, the company has more than 10 million Prime subscribers. 


Morningstar estimates that Prime accounts for about one-third of Amazon's operating income, so the desire to add more subscribers has some obvious benefits for the company. Especially when considering that some estimates have Amazon hitting 25 million to 27 million Prime subscribers by 2017.

But those estimates are where Netflix is now. The company has about 29 million U.S. subscribers, and those users watch an amazing amount of content. A Sandvine report said Netflix made up more than 32% of all U.S. peak time downstream traffic for the first half of 2013, compared to Amazon's 1.3%. A BTIG media analyst estimates Netflix could easily reach 40 million subscribers by 2015, which would push it even further ahead of Amazon.

If subscribers and streaming traffic aren't enough, Netflix also has critically acclaimed original programming, including the Emmy-award-winning House of Cards. The show is the first online-only programming to ever win an Emmy, not to mention that other Netflix original programming received 14 nominations total.

While a set-top box could help Amazon sell more of its Prime subscriptions, Netflix has proven it can dominate the space without its own box. Netflix is continuing to build its original programming and even an Amazon box isn't likely to cause a slip in the company's streaming lead. 

The 800-pound Apple in the room
Though releasing a streaming box may be easy for Amazon to do -- it already knows how to run a successful streaming service and tablet division -- it's not so simple to overcome Apple's dominance in the living room. Apple TV accounted for 56% of all streaming boxes sold in 2012, with Roku following behind with 21.5%. Not to mention that all of Apple's devices account for a whopping 35% of all audio and video streaming on fixed access networks in the U.S.

Apple also has the advantage over Amazon by tying Apple TV right into its already-strong ecosystem. Although Amazon has what it calls Fire OS, it doesn't have the same strength as Apple's platforms or ecosystem, and it's not likely Fire OS will ever catch up. In the U.S. and Canada, Apple's iPads make up a 84.3% of all Web traffic in the U.S. and Canada -- compared to just 5.7% for Amazon's Kindles.

On top of that, Apple combines its iOS platform with Apple TV by allowing users to display content from their iPhone and iPads onto the device. This ability further strengthens Apple in the living room streaming space by allowing alternative ways to watch content and adds another barrier for newcomers like Amazon to enter the space. With Apple dominating with its Apple TV sales, Internet traffic usage, and integrated platforms, Amazon will have hard time usurping the company any time soon.

For Amazon to see significant gains from its set-top box, it'll have to overcome consumers' habits that lead them directly to Apple and Netflix. With Apple's famous brand loyalty and Netflix's huge downstream traffic lead, an Amazon set-top box will surely be the underdog fighting two heavyweights -- at the same time.

Who will win the battle for the living room?
Television viewing in America takes up almost as much time as the average work week, which means there's enormous potential for profits in the space. The Motley Fool's top experts have created a new free report titled "Will Netflix Own the Future of Television?" The report not only outlines where the future of television is heading, but offers top ideas for how to profit. To get your free report, just click here now.

The article The Problem With Amazon's Television Ambition originally appeared on Fool.com.

Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Netflix. The Motley Fool owns shares of Amazon.com, Apple, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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