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Roku 'Store' Opens With 10 Channels

Roku Inc. is booting up a new "Channel Store" with 10 free channels, but the firm, which already distributes programming from Netflix Inc. (Nasdaq: NFLX), Amazon.com Inc. (Nasdaq: AMZN), and Major League Baseball, lacks fare from a major broadcast or cable programmer in the new offering. (See Roku 'Channel Store' Is Open.)

The new store allows users to control which channels appear on their TV screens, but the move also positions Roku, which has built a business on set-tops that deliver Web-fed video to the TV, to eventually sell content directly to its customers.

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Blip.tv , which distributes niche Web series on its site, is the biggest video brand included in the channel expansion. Some of the new channels focus purely on the sharing of photos through social networks, including Facebook Photos, Flickr , and FrameChannel.

Rounding out the new lineup are podcast aggregator Mediafly, social network organizer MobileTribe, video sharing site Motionbox, Internet radio site Pandora, Internet video site Revision3 , and live Web video netcasting site TwiT.

Roku, which plans to add new channels automatically as they become available, is an over-the-top Internet video provider that relies on cable modem and DSL high-speed Internet connections to deliver Internet video content to televisions that are hooked up to one of its set-tops, which range in price from $80 to $130.

Roku's new store will be delivered via an automatic, free upgrade to all Roku customers over the next couple of weeks. After 18 months, Roku counts “hundreds of thousands” of customers, according to its director of corporate communications, Brian Jaquet.

Roku is competing against Apple TV, Boxee , and other firms looking to make a profit from Web surfers who want to watch Internet video on a TV, including some consumers that are cutting the cord on traditional cable pay TV services and instead relying on the Web for all of their video needs.

Belmont, Calif.-based Sezmi Corp. threw its hat into the ring last week, with the launch of its first market trial in Los Angeles. (See Sezmi Launches Video Services Pilot in LA.)

While Roku doesn’t have any major broadcast or cable network programmers, such as NBC Universal or Discovery Communications Inc. (Nasdaq: DISCA, DISCB, DISCK), included in its new channel lineup, the company could eventually sell content directly to customers through the Roku Channel Store. “Clearly there are some services in the future that you could charge for,” Jaquet says.

Netflix subscribers can use Roku to watch programs from previous seasons of series such as Comedy Central’s South Park, and Amazon video-on-demand customers can order TV episodes from major broadcast and cable networks for $1.99 apiece.

Roku is talking to other content providers about supplying programming to its customers, Jaquet notes. “Clearly our focus is to have the most robust set of content available, including more music, sports, and photo sharing.”

Jaquet says the majority of Roku customers use the set-top to watch movies downloaded from Netflix on a TV. Without disclosing Roku’s exact subscriber count, he claims that on any given day about one-third of Roku customers use the product, and that customers use Roku for an average of 2.5 hours each day.

— Steve Donohue, Special to Cable Digital News

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