Roku Hits 10 Million Mark – Now What?

Roku, the little streaming box that could, announced Tuesday that it has now shipped more than 10 million players in the US since its launch in 2008.

While it started out as a dedicated Netflix streaming player, today Roku Inc. boasts more than 1,800 channels as it achieves this milestone. Besides the Netflix Inc. (Nasdaq: NFLX) service, Roku's lineup includes apps from Hulu LLC and Amazon.com Inc. (Nasdaq: AMZN); broadcaster channels from networks like Fox Broadcasting Co. , Walt Disney Co. (NYSE: DIS) and Home Box Office Inc. (HBO) ; and apps from such major pay-TV providers as Verizon Communications Inc. (NYSE: VZ) and Time Warner Cable Inc. (NYSE: TWC).

Roku was a pioneer when it hit the market six years ago, but consumer adoption has risen steadily since that time. In a recent report, analyst firm NPD Group Inc. found that 6 million homes in the US acquired streaming devices over the last year, bringing market penetration to 17% at the end of the second quarter. NPD also predicts that penetration will rise to 29% by 2017, making players a mainstream product.

Market growth is both good news and bad news for Roku. Demand is on the rise, but so is competition. Apple Inc. (Nasdaq: AAPL), in particular, has been successful with its Apple TV devices, outselling Roku and capturing 39% market share in the US, according to NPD. Roku, in contrast, has 28% US market share.

Roku counters those numbers, however, by pointing out that Roku users stream an estimated 27 million video hours per week compared to the roughly 15 million hours that Apple TV users stream. Google (Nasdaq: GOOG)'s Chromecast rings in at 12 million streaming hours per week, with Amazon's Fire TV logging 6 million hours weekly.

The big question for Roku is where to go from here. The company is innovating on the hardware front, and has introduced both new Roku-equipped smart TVs and HDMI streaming sticks. (See Roku Sticks It to Google.)

For ongoing coverage of the rapidly developing media streaming market, visit Light Reading's OTT video content channel.

Roku has an additional opportunity for growth as well in selling its hardware and software as a bundled platform. The company recently introduced a new white-label program called Roku Powered that is targeting pay-TV providers that want to complement their existing offerings with new online services. TiVo has already proven that the service provider channel can be a lucrative one, and Roku appears to want to cash in on TiVo's findings. (See Roku Pursues Pay-TV Providers.)

NPD Group also notes that content will continue to be critical to the success of any streaming media player going forward. John Buffone, executive director of NPD Connected Intelligence said recently, "Content is what's going to bring these devices to the next level. It's not just necessary to be able to stream popular video services such as Netflix and Hulu. Device manufacturers must also have the ability to attract a wide array of content owners and developers to build apps for their platforms -- which is the direction Apple, Roku, Google and Amazon are taking with their devices."

— Mari Silbey, special to Light Reading

thebulk 9/17/2014 | 2:29:15 PM
Re: Much love for Roku As always, content is king! 
kq4ym 9/17/2014 | 10:26:15 AM
Re: Much love for Roku The content is surely going to be where consumers head. If the programs they want are there, that's where they'll buy. Roku has a good lineup but going against heavy Apple branding is a bit of a problem they'll have to overcome to come out as the leading provider. But 10 million boxes delivered is surely not anything to complain about.
thebulk 9/17/2014 | 2:50:52 AM
Re: Chromecast vs the Boxes Roku went through similar growing pains, now the device has a really great experience.
jabailo 9/16/2014 | 2:40:56 PM
Chromecast vs the Boxes Chromecast has been my media device for the past few months.

When it works, it's great.  But it's dependent on participating companies doing the real work.  Thus, Amazon only just this week released an Android app for watching Instant on Google TVs, but it's not compatible with any of my devices and I saw no mention of Chromecast.

YouTube and Netflix, my two biggest sources, work great.  But I still have to watch Amazon on my laptop (tabcasting, where you screen mirror is a non-starter.  Too laggy).  I did buy a 6ft HDMI cable, but really.  Really?  Do I have to plug in a whole computer when all that is needed is an Android app?

thebulk 9/16/2014 | 2:22:53 PM
Much love for Roku When I lived in the US I loved my Roku, I actually had 3 in my house. When I got my first one it was really just for Netflix and there wasnt much more on there, as they improved their content there was some very interesting stuff on there. I remember it was Roku where I discovered the amazing show that was Cooking with Coolio, if you have not seen it, you must. 

But despite all the cool tech, content really is king, and if it had not been the content that Roku made it easier for me to access it would have just been paperweight for me once I could get Netflix on my smart TV
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