Six months after refreshing its flagship set-top box, Roku has updated the rest of its streaming product line, adding additional features while maintaining its price points. The Roku LT, Roku 1, and Roku 2 players, announced Wednesday, will be available online and in retail stores October 1. In addition, Roku 3 has been made available in the U.K.
Last year, Roku players streamed more than a billion hours of content. On average, Roku users watch about 13 hours per week; a quarter of Roku owners stream 35 hours weekly. A Parks Associates report last month crowned Roku as America's favorite streaming device, penetrating 37% of homes with set-top boxes—compared with Apple TV's 24%.
Yet even with its strong hold on the market, competition is crowding the set-top box space. Wall Street has been anticipating a rumored high-definition Apple TV set—not just a box—for years; an Apple TV or a new Apple box could be arriving as early as October. Amazon is rumored to be readying a set-top box that would take advantage of its content library. Google's $35 Chromecast dongle has seen immense demand, selling out online on Amazon and Best Buy within a day of its launch back in July. Sony has also thrown its hat in the ring, debuting a streaming stick last week. And of course, video game consoles have become popular devices for streaming—and both PlayStation and Xbox have highly anticipated launches coming up in November.
The entry-level Roku LT aside, the company decided to simplify the naming of its boxes. The Roku 1 replaces the Roku HD, and the Roku 2 will take the place of the Roku 2 XD. In March, the company replaced the Roku 2 XS with the Roku 3.
"We wanted to make it very, very simple. That's one of the drums we beat in Roku—the way we do our business, the way we do our product, the way we do our interface," director of product management Lloyd Klarke told Fast Company.
When Roku introduced its new top-of-the-line box, the most notable features were a refreshed user interface that simplified navigation and a remote with a headphone jack that allowed for private viewing on the big screen. That audio port can now be found on the remote of the Roku 2 player. "It brings the price point down for the headphone jack [from $100, the cost of the Roku 3]. When people bought the Roku 3, 40% of them said they bought it because of the headphone jack," Klarke said.
Internal surveys found that more than half of Roku 3 owners use the port. "It's one of those things that solves a small problem that makes people's lives better," Klarke added.
The streamlined interface, which makes it easy for users to travel between menus from left to right, has been updated to highlight an integrated video-on-demand service called M-Go in the home screen. This partnership will put M-Go on the map—a relative unknown against streaming heavy hitters such as Netflix, Amazon, and Hulu. A joint venture between Technicolor and DreamWorks, M-Go launched in January at CES and is led by CEO John Batter, who previously held top roles at DreamWorks and Electronic Arts.
Given its backing, M-Go, a video rental and purchase service, says it is able to work with Hollywood studios to secure releases earlier than Netflix. "If you want new releases, it can't be subscription," M-Go spokeswoman Stacy Katz said. Movies are typically available two weeks before they come out on physical media (and sometimes the company is able to negotiate availability the day of a theatrical release), and TV episodes are often available the day after they air. The M-Go catalog numbers about 17,000 titles and is expected to reach 25,000 by the end of the year. The service has maintained a low profile since its debut, but it has been working on integration with smart TVs—including LG, Samsung, and Vizio—as well as expanding its mobile footprint. In addition to its Android app, which is already available, the company is gearing up to launch an iOS app next month.
With M-Go embedded in the set-top box's firmware, right out of the box (unlike Netflix, for example), the video service is given prime Roku real estate with two home menus: TV and movies.
Klarke said Roku chose to work with M-Go because of M-Go's selection of content and its integrated billing engine, which doesn't require viewers to enter a credit card number for rentals and purchases (a PIN is still needed). The partnership lets Roku serve viewers looking for the latest releases, giving the hardware maker an edge over pay TV—at least with theatrical releases. The integration also gives Roku footing against the likes of iTunes and Amazon, both of which sell shows and movies à la carte (though Amazon also uses a subscription model).
Furthermore, Roku also intends to highlight news, to be curated by AOL, in the home screen down the line.
"We created [the user interface] in mind to expose more and more things on the top level, so people can find things clearly," Klarke said.
So what's next for Roku? In addition to the UI's new menus and ability to surface more channels, Roku is also looking to add features to aid discovery, which now centers largely around a top-level search that helps users finds movies and shows across different channels. "Certainly we are looking at different ways of helping people find something to watch," Klarke said. "You can call it discovery. You can call it search. You can call it whatever you want."
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