Roku Sharpens Stick To Take on Apple TV

9/24/2012 8:01 AM Eastern

Roku wants to poke a stick in Apple TV’s eye.

The company, whose backers include News Corp. and BSkyB, is expanding beyond its signature Internet set-tops with a small, $100 wireless device that plugs into the back of a regular television to deliver a wealth of over-the-top content.

In addition, Roku struck a deal to provide Walmart’s Vudu online video-streaming service, which offers more than 100,000 pay-per-view titles, on Roku devices and enhanced its mobile app to let users display photos and play music via Roku devices.

Roku has sold more than 3 million of its set-top boxes since first introducing them in 2008. Its primary competitor is Apple’s $99 box, which provides access to services including Netflix, YouTube and iTunes, and has sold a similar number of units.

By comparison, Roku promises a far broader selection of content than Apple TV, with more than 600 channels, of which roughly 75% are free to users, though many of those are in niche genres. Content partners include Netflix, HBO Go, Disney, Fox News Channel, Amazon Instant Video, Hulu Plus, Pandora and UFC.

Currently, Roku does not provide access to Google’s YouTube, which is overwhelmingly the Internet’s most popular video website. But the company is “absolutely working with YouTube” on a deal to add its content, director of product management Lloyd Klarke said.

With the Roku Streaming Stick, a USB-size wireless device, the company is trying to piggyback on sales of regular HDTVs and Blu-ray Disc players by bundling its device into the retail price. The first products compatible with the Roku Streaming Stick are TVs from Best Buy’s Insignia brand, Apex Digital and Hitachi, but Roku has not announced any product bundling deals yet.

Roku’s pitch is that it handles all the software updates and Internet connectivity, so consumer-electronics makers can focus on their core products. And swapping out the $100 stick is easier than replacing an entire TV set; consumers typically replace their TVs every six to eight years.

The stick will be available in October for $99.99 from Roku’s website and, with other retailers in the pipeline. The device is manufactured by Foxconn Technology Group, which also produces Roku set-tops.

One limitation of the Roku Streaming Stick is that is relies on the Mobile High-Definition Link (MHL) specification. Originally designed to let smartphones transfer content to TVs, the technology is not widely supported today. “MHL is still young,” Klarke acknowledged, but added that 50 MHL-enabled TV models are set to ship by the end of 2012.


Roku hopes to broaden its base of over-the-top video fans with a plug-in device that turns regular HDTVs into Net-connected sets, while adding content from Vudu and enhancing mobile features.

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