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Roku Selling OTT Video to Pay-TV Ecosystem

8 Sep, 2014 By: Erik Gruenwedel

Roku launches foreign marketing campaign intended to meld subscription streaming with traditional bundled channel offerings

Roku Sept. 8 announced it has expanded its international presence through the launch of a marketing program designed to implement its streaming technology with third-party pay-TV operators.

Dubbed “Roku Powered,” the program is intended for pay-TV services to enhance their bundled channel business model by incorporating over-the-top streaming. While OTT is considered kryptonite by many to the multichannel video distribution market, Roku contends embracing technology that enables services such as Netflix, Amazon Prime Instant Video and Hulu Plus to thrive will enhance premium television.

The Roku Powered program provides pay-TV providers with access to low-cost hardware, software, a simple and intuitive user interface, a broad selection of streaming content, and access to ongoing software upgrades. Software customizations include pay-TV operator branding of every stage of the user experience, custom user interface themes, built-in promotional capabilities, and control of the streaming content available through the platform.

Roku believes OTT video can help reduce MVPD video subscriber churn and actually encourage broadband tier upgrades. Indeed, while pay-TV operators continue to experience ongoing declines in video subscribers, some of those losses have been offset by high-speed Internet subscriptions.

“There has been [a] demand from pay-TV providers for a simple way to address the increasing consumer interest in Internet-delivered entertainment,” Steve Shannon, GM of content and services at Roku, said in a statement.

Roku cut its teeth connecting with pay-TV in 2012 when it partnered with satellite TV operator BSkyB, which led to the development of the Now TV set-top-box in July 2013. It was the first time Roku had licensed its streaming platform, allowing Sky to extend its pay-TV market-leader status in the United Kingdom.

The collaboration was prompted in part by Rupert Murdoch-owned News Corp. (now 21st Century Fox) and Sky investing $45 million in Roku in 2012. Murdoch is a majority stakeholder in Sky.

“The innovative licensing approach we developed with Roku dramatically reduced our time to market, enabling us to capitalize on the growing demand for Internet TV by launching a powerful and great value streaming box,” Emma Lloyd, director of corporate business development at Sky, said in a statement. “The Now TV Box is already a key component in our OTT leadership, giving customers another simple way of accessing Sky content and further extending our distribution footprint.”

Indeed, Sky this year implemented shipments of DVDs as backup to electronic sales of movies and TV shows via the Sky Store.


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