I’m one of the 5 million fans of the Roku streaming media device, running it with the TV in my master bedroom. With the recent release of the $99 Roku 3, I couldn’t miss Roku founder and CEO Anthony Wood’s talk at the South by Southwest (SxSw) Interactive conference on Sunday.
Content-wise, it didn’t disappoint, as Wood shared some colorful views about competitors. On Google TV: “We take them seriously but they have almost no market share.” Apple, whose $99 Apple TV remains the market leader with an estimated 15 million sold, is not that “motivated” to win, argues Wood, because it makes more money on the also streaming-capable iPad. As for an actual television set from Apple, Wood claims he “personally hopes they build it” because it would drive TV and other hardware manufacturers to embed Roku’s software directly into their gear.
For Roku fanboys (like myself), some of Wood’s other comments may dismay, especially around YouTube. Wood basically confirmed a report last week in the StreamingMediaBlog written by Frost & Sullivan analyst Dan Rayburn that the single-core ARM 11 processor used in older Rokus was a technical hangup for YouTube.
Roku CEO Anthony Wood: “focused on the long-tail”
Related Resources from B2C
» Free Webcast: Strategic Thinking: Social Media + Social Business Strategy
“Youtube insists on using HTML5 for its UI. When you put that on our [old] Rokus, the picture didn’t move,” he said. The new Roku 3′s faster chip – it uses the same dual-core ARM Cortex-A9 used in the third-generation, 2012 version of the iPad – and revamped user interface enables YouTube now to “work acceptably well, though it’s not snappy,” Wood said.
While Rayburn was hopeful that “an official YouTube channel could come to the Roku 3 shortly,” I’m more circumspect due to two factors: the increasing competition for content between the two firms, compound the already-tricky issue of licensing.
Roku already officially offers 750 channels, including big names such as Netflix, Hulu, Amazon instant Video, HBO Go, as well as many smaller channels from small broadcasters or individual video bloggers who can apply to have their channels promoted in Roku’s Channel Store at no cost.
While Roku users viewed 1 billion hours of streamed content last year, up from 420 million in 2011, only 20% of those hours were from Roku’s 700+ smaller video channels, who make money through subscriptions or ads. Wood is eager to attract more.
“We are trying to be a lot more focused on the long-tail,” Wood said.
Grass-roots video, of course, is dominated today by YouTube, which has more than a million video creators and bloggers making money through its ad program.
Wood didn’t volunteer this brewing conflict as a point of tension, and I was too slow to ask. But his comments made it sound that any alliance was still far off.
“We have not reached business terms yet with YouTube, but I am hopeful that we will,” he said.
Roku, which was a division of Netflix run by Wood until it was spun out in 2007, could also beef up content by creating original programming as Hulu or Netflix’s recent House of Cards drama. But Wood sounded doubtful. “I’d never say never, but we are not doing that now,” he said.
Besides Roku’s 750 official channels, there are also several hundred “private channels.” These are unofficial video channels similar to apps available to iPhone users with “jailbroken” devices (though Roku users do not need to ‘break’ their devices to gain access to them). Channels run the gamut from business to weather to pornographic and those showing pirated shows and movies. “There is bad content,” acknowledged Wood.
Despite that, Roku has a much friendlier relationship with its private channel operators than Apple does with the jailbreaking community. While Apple tries to remove jailbreaks with new OS updates, Roku does not actively police the content in the private channels, Wood said. Still, Roku does quickly remove channels when it receives a copyright infringement notice, which happens about once a week, he said.
Wood is also eager to build up Roku’s official selection of apps and games, of which there are about 100 today. One app that has been highly requested by Roku users is Skype videoconferencing. On this, though, Wood remains dubious.
“We’ve had many discussions internally but always decided not to do it,” he said. (Full disclosure: my employer Avaya makes its own business-class desktop and mobile video conferencing software that compete indirectly with Skype.)
Woods cites that the failure of past TV-based videoconferencing products as proof of lack of interest.
While personal and desktop videoconferencing is already “very popular on phones and laptops, I don’t think that people want to do that in front of their TV,” he said.