Six Questions: Roku Founder/CEO Anthony Wood23 Mar, 2012 By: Erik Gruenwedel
Two years ago Home Media Magazine asked Roku founder/CEO Anthony Wood six questions about the nascent streaming market and why his upstart $115 media player should be known for more than helping Netflix create the subscription video-on-demand business model. His answer: The set-top box was here to stay, and Roku offered 15 premium (subscription) content channels, in addition to Amazon transactional
VOD movies (Prime streaming didn’t exist yet) and select Netflix streams in high-definition.
Today, SVOD is white hot, with Netflix’s app located on more than 700 consumer electronics devices. Roku hasn’t sat idle, selling more than 2.5 million devices (which retail from $50) to maintain its status as the No. 1 media player, connecting 500 content holders through public and private channels into the living room TV.
Gone, too, is Wood’s belief that home entertainment’s primary distribution channel into the home (besides packaged media) remains the cable/satellite TV box. He recently told PC Magazine that he believes a major cable operator could begin offering separate a-la-carte programming via over-the-top Internet services outside the typical bundled subscription as early as this year (think Comcast’s Xfinity Streampix).
Such a scenario, of course, is a potential goldmine for Roku, which already offers SVOD service Hulu Plus and HBO Go — both requiring separate subscriptions. We caught up with Wood to expand upon the consumer’s growing independence from the cable box and how Roku will fit in.
HM: Roku recently rolled out a streaming stick for smart TVs (notably Best Buy’s Insignia brand) that marked the company’s first move away from its signature media player. Is a Roku app far behind?
Wood: The Roku Streaming Stick is our first step in expanding our platform and OS beyond our stand-alone box and into SmartTVs. Although we expect a growing number of SmartTVs to be powered by Roku, we have no plans for a Roku app mixed in with other apps. We think that would compromise the simplicity we are known for.
HM: The ability to access TV programming anywhere on anything is at the heart of TV Everywhere platforms slowly being rolled out by cable and satellite TV operators. Is Roku a facilitator or direct competitor to multichannel video program distributors (MPVDs) seeking to retain or lure subscribers?
Wood: We are a partner to cable and satellite companies and want to give our customers the most choice possible. This means traditional OTT channels and “authenticated” channels. We expect Roku to become an open set-top box in the living room that will give consumers their choice of content from a variety of companies and services.
HM: Netflix CEO Reed Hastings has always insisted that the streaming service is complimentary to cable/satellite TV. With Comcast bowing streaming option Xfinity Streampix and Time Warner’s HBO Go, it would appear the gloves are off in the SVOD battleground. Is Roku working with MPVDs to offer signature SVOD options to subscribers, or does it want to remain neutral?
Wood: Yes, we view cable and satellite as our partners and we are talking to all the players in the market. In general we don’t favor one brand over another.
HM: Does the primary goal of ubiquitous on-demand programming still revolve around the living room TV, or is the PC, tablet or portable media device more important?
Wood: Consumers are streaming content to many devices, but we still believe the TV is the dominant device in the home, especially in the living/family room.
HM: What percentage of content available on Roku is free versus third-party subscriber authentication? What’s the user penetration on transactional video-on-demand movies from Amazon Instant Video? Or do Roku users prefer primarily TV programming?
Wood: Today we have just over 450 channels on Roku. About half of them provide free content, while the other half have some form of a fee, and those types of channels have a range of payment options from a one-time fee like the Angry Birds game to a monthly subscription such as with Netflix to a season package as with MLB. We have two authenticated channels that require a participating cable or satellite subscription — HBO Go and Epix — and there will be more and more of those types of channels on Roku. To answer your second question, Amazon Instant Video is one of our most popular channels.
HM: Will Roku ever roll out original programming, content exclusives or will it remain strictly a third-party content aggregator?
Wood: We have considered offering our own programming, but today we are not offering it. Our primary goal is to be an open platform that offers the most choice to customers.