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.
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