Roku CEO on future: Smaller, cheaper, more content

With entertainment technology following the general trend of moving towards sole device singularity, it’s worth wondering what Roku – maker of the Roku Box streaming player that connects your television to all manner of Internet-streaming entertainment, such as Netflix, Hulu and other similar services – is planning to do to keep itself from being replaced with Internet-ready televisions or gaming systems that offer everything Roku can and more. Well, according to Steve Shannon, the general manager of content and services at the company, the answer is undercut the opposition and search for ways to diversify the Roku offerings.

Speaking at this year’s 40th annual UBS Global Media and Communications Conference, Shannon told his audience that the low price of Roku Boxes is an important element of the success of the brand at this point; with prices ranging from $49.99 to $99.99 depending on the model (There are five Roku Boxes available currently), Shannon said, “our product is becoming a stocking stuffer.” Illustrating the point, he explained “During Black Friday, we averaged a sale of a new player every two seconds. Millions of players were sold [on that one day]. Our CEO [Anthony Wood] says that, next year, the goal is to sell one every second.”

That goal might be helped by the introducing of a sixth Roku model, described as a streaming “stick” that connects to the HDMI slot of televisions to allow Internet media to be streamed directly to the set. According to Shannon, Roku is already working with television manufacturers to bundle the stick with certain television models to enable a cheaper way of making them “Internet ready” in future. Another potential set of future partners mentioned during the presentation, Shannon revealed, are cable companies; saying that Roku doesn’t consider itself a competitor to traditional cable providers (Although he couldn’t help but point out that – with five million Roku households in the US – the company would rank ahead of Time Warner Cable if it was measured as a cable provider), he called cable companies “prospective partners” and openly imagined a world where Roku might broker a deal that would see Roku boxes bundled in with cable packages to increase the company’s penetration into the market.

Addressing the idea that Roku may be replaced by alternate multi-purpose devices that also offer Internet streaming to televisions (such as Microsoft’s Xbox 360), Shannon suggested that people will likely continue to use those devices for their primary purpose and look elsewhere for streaming connections. This may be borne out by the numbers; Roku’s customer base jumped by five times between 2011 and 2012, despite the availability of both Internet-enabled television sets, Xbox 360s and other streaming devices such as Apple’s Apple TV.

If all of that doesn’t work, however, Roku has one more string to its bow that Shannon mentioned in passing: “We’re also investing heavily on the content services side,” he said. Roku may not become a competitor for cable providers, but if it starts working on its own content, could it become a surprise competitor for Netflix…?

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