Roku has been a staple in the world of streaming devices for some time. One characteristic that they’ve had which differentiated them from competitors like Amazon, Apple, and Google, is not having a horse of their own in the streaming service race. By not competing directly with streaming services, they’ve been able to attract more content providers to their platform than any other streaming device manufacturer. That all might change because today Roku has launched their own channel where they’ll provide free ad-supported movies and shows that they’ve directly licensed from studios, making them a streaming service provider.
The Roku Channel, as it is called, is a new channel (i.e., app) available on select Roku devices that will contain 100% free movies and shows for customers to watch. All content will be ad-supported, but Roku says they aim to show half as many ads as one would find on linear TV. That translates to about 8 minutes of ads per 1 hour of content, where traditional television has an average of 16 minutes.
Roku’s new first party channel will contain a mixture of content they’ve licensed themselves and content from other services available on Roku devices. Content providers already participating include American Classics, Fandor, FilmRise, Nosey, OVGuide, Popcornflix, Vidmark, and YuYu.
The Roku Channel does not contain any branding or indication of which content provider a particular movie or show is coming from. Additionally, videos play directly in the Roku channel and users are never kicked out into the content provider’s channel. This behavior is fine for smaller streaming services like the ones already participating, but would likely never be acceptable for larger content providers who typically demand more control over their customers.
The launch of this new Roku Channel might be remembered as the point where Roku shifted their focus from hardware to content. Roku filed for their initial public offering last week and hopes to raise $100 million. In doing so, they revealed that 81 percent of their gross profit recently comes from the sale of advertising and subscriptions, leaving only 19 percent coming from the sale of hardware. Roku’s profit from content and ads is up 104 percent compared to the second half of last year, so it’s not hard to see the direction things could be going; a direction where content is king and hardware is secondary.