Roku Raises $25M, But for What?

As disclosed in an SEC filing yesterday, Roku has raised another $25 million, taking its funding total to more than $150 million, according to the company's CrunchBase profile.

Roku Inc. hasn't said who participated in the latest investment round, which was spotted early on by VentureBeat and GigaOM. Nor has it provided details on what it will do with the latest influx of capital. But the company faces growing competition from other makers of streaming media players, including Apple Inc. (Nasdaq: AAPL) -- which still claims top market share with its Apple TV device -- Google (Nasdaq: GOOG), Amazon.com Inc. (Nasdaq: AMZN) and several game console providers. So the new funding should help Roku continue to build on its top-two position in the market, and potentially help it pursue new business-model strategies.

On the new strategy front, Roku announced last month that it has launched a white-label initiative designed to make its hardware and software available to pay-TV providers. Following the TiVo Inc. (Nasdaq: TIVO) playbook, Roku hopes that its "Roku Powered" program will offer access to new customers that have already been captured by cable and telco TV operators. (See Roku Pursues Pay-TV Providers.)

Another option for Roku going forward is to consider new content partnerships. Today the Roku platform includes more than 1,800 channels. However, beyond the major apps like Netflix and Hulu, many of those channels have low visibility.

Want to know more about OTT services? Check out our dedicated OTT content channel here on Light Reading.

As the NPD Group Inc. Connected Intelligence analyst John Buffone pointed out recently, "Content is what's going to bring [media streaming 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." (See Roku Hits 10 Million Mark – Now What?.)

In good news for Roku, the popularity of media streamers is rising in parallel with the competition. According to the latest Video Benchmark Report by Adobe Systems Inc. (Nasdaq: ADBE), the growth rates for online video streaming were highest over the last year in the category of over-the-top video streamers and game consoles. Those devices saw their market share more than triple from 3% in 2013 to 10% in 2014. (See Online Viewing Goes Over the Top.)

— Mari Silbey, special to Light Reading

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thebulk 11/2/2014 | 10:40:44 PM
Re: Too Tired To Watch TV Anymore True with the web there is a lot of tech in play so ensuring smooth interaction will be a key piece. No one wants a crashed browser.
Joe Stanganelli 10/31/2014 | 4:39:37 PM
Re: Too Tired To Watch TV Anymore @jabailo: This is a big part of the reason why I ignore so much video content these days.  I'd much rather read it than deal with all the things that can go wrong with whatever web-based media player from hell the video content uses.
Joe Stanganelli 10/31/2014 | 4:38:12 PM
Re: Too Tired To Watch TV Anymore It does make a difference, though.  For instance, if your business model is advertising-based, you have to demonstrate good ROI for your clients -- and if your website shows the same ad 10 times during the same TV show and crashes viewers' browsers, that's not going to be good for your advertising clients, and therefore not good for your own bottom line.
thebulk 10/25/2014 | 1:05:44 PM
Re: Too Tired To Watch TV Anymore I am not sure I 100% buy into that here. I think when the larger players make content they have profit built into the equation no matter what "channel" they release it on. Just my thought. 
jabailo 10/25/2014 | 12:31:49 PM
Re: Too Tired To Watch TV Anymore Just this morning I was browsing Facebook and clicked on a link (yes, they got me) so I could see the newstory.  When I didn't hear the sound, I had to then figure out which one of the three (3!) volume controls to adjust -- the one on my 2.1 speaker system, the computer sound card, or the web video's sound slider control.

At what point does it get to be way too much!

jabailo 10/25/2014 | 12:29:46 PM
Re: Too Tired To Watch TV Anymore When we talk about the inability of people to "monetize" content on the internet, we typically think of some individual putting his work up on YouTube or a blogger toiling away and never getting more than a few bucks from AdSense.

But the reality is, in my analysis that this same problem affects both gargantuan and individual enterprises!  That is, once the channel control is lost, it becomes just as hard for the big players to make money even off "superior" content as it is for the toiling blogger. 

We saw this just yesterday with Amazon's quarterly.


Joe Stanganelli 10/25/2014 | 8:33:12 AM
Re: Too Tired To Watch TV Anymore @jabailo: The simplicity is definitely what I miss the most.  It's a big part of the reason why I think traditional cable is still relevant.  "Watching TV" (as opposed to viewing online content, even if on your television) is a very difference -- and much simpler, more passive, less frustrating -- experience than getting on your device, waiting for things to load, making decisions, waiting for ads to load, having to restart when the content fails to load after watching the ads, watching the ads all over again, then finally watching your content (and having to rinse and repeat for EVERY SHOW YOU WANT TO WATCH!).

Screw Netflix and Hulu and YouTube.  I want to just kick back with my remote control and channel surf.
thebulk 10/25/2014 | 1:10:51 AM
Re: Too Tired To Watch TV Anymore How the content providers approach the market becomes a big part of how we envision the market. The proliferation of bandwidth has really forced content creators and providers to reevaluate their business models and it's still unclear how it will all play out.
jabailo 10/24/2014 | 5:02:49 PM
Re: Too Tired To Watch TV Anymore It's a great question and one I think about.

In the abstact we envision this world where "Everything" is at our fingertips with one standard interface.

But as we all know, business is real world.  There will always be contractual and financial issues and competition and also valid technical reasons like innovations.

Should Beyonce have her own channel?   She does actually, as I read that one radio station was going "All Beyonce".

Should the Beatles, or Marvel Comics forgo maximum royalties to reach a wider audience by being in a subscription library? 

And what about public libraries...where I can now download e-books, and even check out movies online or on dvd (wow, who uses those anymore).

These days content manufacturers are having to enter the same market issues that software makers faced decades ago once they added removable media to PCs!

thebulk 10/24/2014 | 1:07:45 PM
Re: Too Tired To Watch TV Anymore They way the market is pretty much someone will always have holes in their service. the real question is how big of a hole are we willing to deal with? 
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