Hexbyte Tech News Wired
When you think of Roku, you likely think of streaming dongles and surprisingly capable TCL television sets. Increasingly, though, Roku hardware has taken a backseat to the Roku platform, which drove more revenue for the company in the most recent quarter than all those players combined. And if you need any more indication that software will drive Roku’s future more than the hardware that powers it, look no further than the Roku Channel.
Launched in September 2017, the Roku Channel offers over 10,000 free movies and TV shows to anyone with a Roku account. It has ads—served up by Roku—but about half as many as you’d find viewing a traditional television network. In late January, though, it will receive two significant upgrades, each designed to chip away at the boundaries of what Roku is, and what it can be.
The more immediately impactful development centers around the Roku app, which currently works exclusively as a remote control for Roku devices. It fits a lot of functionality under that umbrella—in addition to rote fast forwarding and volume control, you can search within the app for both channels and specific shows or movies—but ultimately, if untethered to a rectangular chunk of black plastic, it’s useless. That changes at the end of this month, when the entire Roku Channel catalog will be available through the Roku app on iOS and Android. You can access it whether you have a physical Roku or not.
While good old-fashioned television still reigns, smartphones have become an increasingly popular vessel for subscription streaming.
Roku had already set loose the Roku Channel on desktop this past summer. But the app represents a larger opportunity. Roku’s Android offering alone has been downloaded over 10 million times, according to its Google Play Store listing. In December it consistently ranked among the top 10 free entertainment apps in the iOS App Store, per app analytics company Apptopia. Rather than having to establish a new destination for streaming content, it can simply fill up its existing mobile watering holes.
And while good old-fashioned television still reigns, smartphones have become an increasingly popular vessel for subscription streaming. Netflix this spring revealed that about 20 percent of its viewing hours globally came from handheld devices, with over half of Netflix members using a mobile device at least once each month. It also gives Roku access to potential customers with no interest in streaming hardware; you don’t need to own a dongle or a smart TV to access the Roku Channel on desktop or mobile, just a Roku account and a tolerance for the occasional ad.
Or no ads at all, given Roku’s other Wednesday announcement. Within a few weeks, the Roku Channel will not only host free, ad-supported content, but offer subscriptions to other streaming services as well. Amazon has done this since 2015; Prime members have been able to subscribe to dozens of streaming subscriptions under the auspices of Amazon Channels. The pitch is roughly the same: By consolidating all those plans under one provider, you can streamline the sign-on and billing processes, and get where you want to go faster.
But Roku believes it still has an edge.
“In order to sign up for one of these channels on Amazon, you have to be a Prime member. For us, there’s no other base subscription that you need to access,” says Rob Holmes, Roku’s vice president of programming and engagement. “The second element is, the primary purpose of Prime is to get you to buy more stuff on Amazon. It’s a membership and retention tool for your shopping on Amazon. And they’ve endowed Prime itself with a lot of great content that you can access as a subscriber. Their incentive is to promote that Prime content, so that you really feel the value of your Prime subscription.”
Because Roku doesn’t dabble in original content, it has no such conflicting priorities.
Still, Amazon’s stable of partners outpaces Roku’s at launch. The latter will feature Showtime, Starz, and Epix as headliners, and includes College Humor’s recently launched Dropout service, but the choices thin out from there. Most notably, unlike Amazon, it lacks HBO.
“We do expect the service to expand,” says Holmes. “There’s probably a series of strategic partners that need to think through how they want to be present in the OTT ecosystem, and that’ll be part of future conversations.” (OTT stands for “over the top,” a catch-all for nontraditional TV offerings.) So many content providers, from Disney to TimeWarner, are going their own way; it’s unclear what alliances the next wave of streaming wars will forge.
If enough of those relationships pan out, though, and with the app coming into play, the Roku Channel begins to look like a formidable presence. It becomes a viable streaming option, everywhere you’d want it, for free. Not only that, but it does so without building moats out of original content. Roku devices have always been the Switzerland of the streaming world; its platform is shaping up as the same.
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