Digital media company Roku is taking a cue from Amazon by selling streaming video subscriptions directly to customers.
Later this month, Roku users will be able to sign up for premium content from Showtime, Starz, Epix, and others through The Roku Channel, a free app that until now has only offered a selection of ad-supported movies and shows. The app will bill users’ existing Roku accounts for subscriptions, and will provide a single interface so users don’t have to jump between different apps for each channel.
A few years ago, Amazon launched a similar service called Amazon Channels, which lets Prime members tack on subscriptions to Showtime, Starz, and other premium channels. BMO Capital Markets estimates that Amazon generated $1.7 billion through Channels last year, and a report by TDG from May found that Amazon Channels accounted for more than half of direct-to-consumer subscriptions for premium TV channels.
Roku’s main differentiator is that it doesn’t require any base subscription like Amazon does with Prime. Still, The Roku Channel will lack some of the channels that Amazon offers, including HBO, PBS Kids, and CBS All Access. Amazon’s app also works on almost every major streaming platform, smart TV, game console, and mobile device, whereas The Roku Channel is limited to Roku players, Samsung TVs, mobile phones, and the web. Rob Holmes, Roku’s vice president of programming, says the company will add more channels and devices over time, but didn’t get into specifics. Roku said it is not yet announcing fees for the add-on content, noting that the pricing will vary by content provider.
Roku and Amazon may not be the only ones looking to sell premium video subscriptions to their customers. Apple is reportedly planning a similar strategy alongside its push into original video this year, which means the race to become your one-stop shop for video is now beginning in earnest.