Roku Breaks Free Of the Set-Top Box

WILL Bow on Inexpensive TCL, Hisense smart TVs
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Gearing up for its coming battle with Google’s new Android TV platform, Roku is about to free itself from the shackles of the settop box and run its platform and apps directly inside television sets made by two major consumer-electronics companies based in China.

Following the announcement of its TV-integration plans at January’s International CES in Las Vegas, Roku said TCL has begun to take pre-orders on four Roku TV models, at Amazon.com, and will make them available from major retailers nationwide in the “coming weeks.”

Hisense, meanwhile, said it is primed to start selling four Roku TV models of its own starting in “late September.”

Based on pricing details released last week, it’s clear that Roku will initially be shooting for the lower end of the market, rather than targeting pricier (and much larger) TVs made by the likes of Panasonic, LG Electronics and Samsung, which have all developed their own operating systems for their respective lines of connected televisions.

TCL’s initial wave of Roku-powered TVs include a 32-inch model for $229, a 40-incher for $329, a 48- inch model for $499, and a 55-inch TV that will fetch $649. TCL is expected to start shipping those models by August 22, according to a Roku spokesperson.

Hisense is on board to distribute four Roku TVs under its H4 Series umbrella, starting off with 40- inch, 48-inch, 50-inch, and 55-inch models. Hisense reportedly will let its retailing partners decide on pricing.

Roku TVs from both TCL and Hisense come with remote controls with buttons that provide direct access to Amazon Video, Netflix, Vudu and Rdio.

Roku declined to reveal the financial terms of its business relationships with TCL and Hisense, but they are believed to be based partly on licensing and service agreements.

With this new, fully-integrated TV approach, Roku is now in position to continue selling specialized streaming boxes and adapters while also targeting a portion of a still-growing smart TV market. According to NPD DisplaySearch, 13 million connected TVs will ship this year in North America, representing 32% of all TVs for the region, and rise to 14 million (35%) in 2015.

Colin Dixon, founder and chief analyst of nScreenMedia, said he believes Roku will be well served by its pursuit of the lower end of the market.

“I think it’s a poorly served part of the market. Low-end TVs typically don’t have this functionality,” he said. “TCL and Hisense immediately have a competitive smart-TV product. They’ll pick up people at the lower end of the spectrum and bring them to the Roku platform.”

The wild card, he said, is how well Roku performs on those TVs on a day-to-day basis. “Their user interface is tried and tested and reliable on the Roku boxes, but how well will it work for television?” he asked. “That’s the big question.”

New TV-set integration deals are entering the picture as Roku continues to grapple with the Apple TV, Amazon’s new Fire TV box, the Google Chromecast streaming adapter, and an expected wave of TVs and streaming devices that will operate Google’s new Android TV platform.

If its debut on TCL and Hisense TVs is successful, Roku is poised to parlay those partnerships into users of a platform that now supports more than 1,500 “channels,” including several authenticated TV Everywhere apps such as HBO Go and TWC TV. Roku announced in January that it had shipped about 8 million devices in the U.S., but hasn’t released any new figures, including how many devices it has sold outside of the U.S.

TCL and Hisense are the only TV makers so far to announce direct integration deals with Roku. However, several other TV makers — including Curtis, Element, Haier, Insignia (Best Buy’s CE brand), Oppo, Apex, and Polaroid — have developed or are developing TV models that work with a Roku streaming stick that requires a specialized Mobile High-Definition Link (MHL) interface.

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