Roku enters the streaming service business with their own new channel

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.

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7 comments
  1. TechyChris says:

    I have a Roku in my spare room, I swear every time I use it I feel like it’s 1996, Roku simply cannot compete with the AFTV or Shield.
    The claim that they have more content providers is extremely misleading since 1/3 are religious channels(the holy roller set really locked onto the Roku platform for some reason). Another 10-15% of the channels are no longer maintained and nobody bothers to clean house. You know the old saying “Quality over Quantity” AFTV all the way!!! If I could afford the new model coming out I would put the Roku out in a yard sale!

  2. pmcd says:

    There are really only 3 viable media platforms: Android TV, Apple TV and Amazon’s Fire TV. Amazon has a future because of content from Amazon. Otherwise it would really just be Android TV and Apple TV, both of which have mature development tools.

    • Monty Scroggins says:

      I love the FireTV and I also love the Rokus. I have tested the Apple TV and didnt find anything to make me want it more than the others.. I have multiple Android TV devices too.. They are fun for tinkering.. but not my choice for day-to-day use.

      The FireTV versus Rokus are close for me.. I use both daily and really dont have a big preference.. There are little things – the AFTV simply cannot function without an internet connection… The roku can stream plex locally etc.. The AFTV has an inferior remote in my opinion.. The Roku remote has a headphone jack etc… Some things take forever to show up on AFTV when they are already available for the Roku – NFL gamerewind channel for example.

      My wife prefers the Rokus a little because the UI is a little more intuitive. I personally dont have a problem with either.. I am still adjusting to the brand new UI on the firetv. But I like it fine.

      Its just a little preference here and there.. but to make the statement that the platform isnt viable is ridiculous.

      Roku has huge market share – https://www.comscore.com/Insights/Blog/Roku-Leads-OTT-Streaming-Devices-in-Household-Market-Share

      • pmcd says:

        I also like both the Fire TV and the Roku. I’ve had them almost from the beginning. The issue with the Roku is with the development platform. Android TV ( I was thing the official one not the tinkering kind you mentioned) and the Apple TV both have huge development infrastructures behind them. So does the XBox for that matter. Amazon’s Fire TV is a variant of Android and has Amazon content and Prime Videos behind it. The Roku, as nice as it is now, doesn’t have a huge development platform behind it. If developers have to choose who to develop for I would guess that it would be Apple, Google and probably Amazon. We are in the relative early stages of the shift to streaming. It’s my opinion, of course, but I see no future for Roku. I suppose that the game consoles are a big question mark but the only real players in mobile are Android and iOS. Not hard to extrapolate from there. We will just have to wait and see, I suppose.

  3. Dave B says:

    I left a request over two weeks ago that I couln’t get the roku channel to install on my roku 3.
    This is the answer I got today:
    “The Roku channel is currently available only in Roku Ultra and Roku Tv modes. The other Roku model does not support The Roku channel.”
    Just another ploy to upsell to a newer device.
    I wish they had a tradein offer, I have half a dozen of the older boxes in my closet.
    Good thing I didn’t buy the Roku Premiere or Roku Premiere plus.

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