Roku is expanding beyond its signature Internet set-tops with a small, $100 wireless device set to ship next month that plugs into the back of a regular TV to deliver a wealth of over-the-top content, and announced a deal with Walmart Stores’ Vudu online-streaming service.
In addition, the company is enhancing its mobile app to let users display their photos and play music on Roku devices.
Roku, whose investors include News Corp. and BSkyB, has sold more than 3 million of its set-top boxes since first introducing them in 2008. Its primary competitor is Apple’s $99 box, which provides access to services including Netflix, YouTube and iTunes, and has sold a similar number of units.
By comparison, Roku promises a far broader selection of content with more than 600 channels, of which roughly 75% are free to users, though many of those are in niche genres. Content partners include Netflix, HBO Go, Disney, Fox News Channel, Amazon Instant Video, Hulu Plus, Pandora and UFC.
Currently, Roku does not provide access to Google’s YouTube, which is overwhelmingly the Internet’s most popular video website. But the company is “absolutely working with YouTube” on a deal to add its content, director of product management Lloyd Klarke said.
With the Roku Streaming Stick, a USB-size wireless device, the company is trying to piggyback on sales of regular HDTVs and Blu-ray Disc players, by bundling its device into the retail price. The first products compatible with the Roku Streaming Stick are TVs from Best Buy’s Insignia brand, Apex Digital and Hitachi, but Roku has not announced any product bundling deals yet.
Roku's pitch is that it handles all the software updates and Internet connectivity, so consumer-electronics makers can focus on their core products. And it’s easier to swap out the $100 stick than replacing an entire TV set, which consumers typically replace every six to eight years.
CE companies “can now deliver a complete streaming experience without painstakingly building it themselves,” Chas Smith, senior vice president and general manager of Roku’s platform original equipment manufacturer business, said.
The stick will be available in October for $99.99 from Roku’s website and Amazon.com, with other retailers in the pipeline. The device is manufactured by Foxconn Technology Group, which also produces the Roku set-tops.
One limitation of the Roku Streaming Stick is that is relies on the Mobile High-Definition Link (MHL) specification. Originally designed to let smartphones transfer content to TVs, the technology is not widely supported today. “MHL is still young,” Klarke acknowledged, but added that 50 MHL-enabled TV models are set to ship by the end of 2012.
The Roku Streaming Stick, when purchased separately and not bundled with another device, includes an enhanced remote with volume buttons and motion controls for game play as well as a copy of Angry Birds (as does the Roku 2 XS model).
In another bid to combat Apple TV, Roku is adding a feature to its remote-control mobile apps for iOS and Android devices, dubbed “Play on Roku,” that streams photos and music to TVs. The feature is compatible with MP3 and M4A audio files and JPG and PNG image files.
That’s similar to Apple’s AirPlay technology for mirroring content on iPhones or iPads to an Apple TV set-top, although Play on Roku does not support video, Klarke said.
Meanwhile, the deal with Vudu gives Roku users access to more than 100,000 pay-per-view titles, including new Hollywood releases, older movies, independent films and TV shows. Vudu provides some content in 1080p HD format, with titles available the same day they are released to DVD or Blu-ray.
Roku in July announced $45 million in funding from News Corp., BSkyB and prior venture-capital investors Menlo Ventures and Globespan Capital Partners. The company said an “unnamed strategic investor” also joined the round, which the Wall Street Journal reported was Dish Network.
Saratoga, Calif.-based Roku has 200 employees. Its players are available in the U.S., the U.K., Canada and Ireland.
