Trender Research™

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Can Roku Compete in an OTT World with Google and Apple devices?

There has been a lot of discussion about the impact Google and Apple's new Internet TV devices will have on the market. In short, they will certainly spread the OTT message to more people and drive competition, innovation, more content relationships, and lower prices. But how will they change the landscape for existing devices such as Roku?

Roku has done a great job combining the key features of an Over the Top video solution for the masses: low price, simple UI/remote, easy set-up, and broad mix of content. Taken together, this was the first "bowling pin." Now that they are adding apps and content, separating their product into a nicely targeted product line of three increasingly capable devices, and focusing on adding new channels, they are raising the bar for new entrants.

Their technology is not all that new or unique, but their strategy and execution and flexibility have been crucial in building momentum in a fragmented and still fairly nascent market. They also were not trying to boil the ocean (like many: e.g., ZillionTV, Sezmi) by launching loss-leader hardware in hopes of eventually making money through fuzzy concepts like "community", "apps", or "next gen advertising", they actually make money on the box and are quite happy channeling these profits into whatever future opportunities may come about.

Roku could also be one tool for "cord-cutters", but they don't have to be. Question is: stacked against the resources and brand of giants like Google and Apple, will they offer a comprehensive enough solution to compete. My take: at least for now, simple and low cost is king (as long as the content quality/diversity is good enough).

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