Roku Out to Overcome Discovery Issues On Streaming Devices
The ability for consumers to discover content on streaming devices is a “real and pressing problem,” Scott Rosenberg, Roku vice president-business development, content and services, told the Streaming Media East conference in New York Tuesday. Roku has more than 1,200 apps on its devices now and his team’s “whole job is helping partners get discovered,” he said.
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Even with “iconic” brands such as History Channel and Duck Dynasty, Roku must still work to help such brands get discovered by users of Roku devices, said Rosenberg. The discovery issue was already a challenge in the cable-TV environment and the problem is “only exacerbated in a million-channel over-the-top environment,” he said. Roku is “at work on a bunch of different strategies” to help brands “break through” the abundance of apps on its devices, said Rosenberg. One huge benefit for TV channels with streaming apps is that channels can “construct a user experience” now that highlights the strength of their brands, he said. That wasn’t possible before streaming device apps, he said.
The “new frontier for everybody” in the streaming device space is “recommendation,” said Matthew Durgin, LG director-smart TV content. Streaming devices are being used by consumers with many different tastes, so being able to recommend content that’s “relevant” to users is something LG is focused on, he said.
The content discovery challenge was also stressed in a panel later in the day. Redbox Instant by Verizon is working on improved discovery solutions for its service and “optimizing” the general user experience this year, said Imran Maskatia, senior director-product management. His company is seeing growing support for HTML5 among companies in the connected TV market, he said. That trend will only widen in the next couple of years, predicted Evan Young, TiVo senior director-product marketing.
Online activation rates are strong on Roku devices, Rosenberg also said. That’s a no-brainer because consumers are buying Roku devices specifically to access streamed content, he said.
Online activation rates are also strong on LG smart TVs, said Durgin. The activation rate is about 65-75 percent among buyers of LG’s smart TVs in the U.S., he said. Durgin declined to say what period that was for and how that compared to the same period a year earlier. Nearly 75 percent of LG’s TV models are smart models this year, he said.
Roku has shipped 8 million of its streaming devices in the U.S. and those devices remain the preferred streaming devices in the homes of users, Rosenberg also said. Most of them are “active on a monthly basis,” he said. Roku users are spending an average of 14 hours a week per Roku device, he said. About 1.7 billion hours of viewing was done by consumers on its devices last year, he said. There’s a “deep pipeline” of new apps still coming to Roku devices, he said.
The Epix TV network is seeing “astronomical” usage of its content on Roku devices, said Emil Rensing, Epix chief digital officer. The company was “surprised” by that, he said, saying Epix “didn’t have a whole heck of a lot of expectations” for its performance on the Roku devices initially. Epix launched an app on Roku’s platform because “it was easy,” he said. Usage is also still growing on the devices, he said. Epix is a small company, with under 80 employees, so it’s “hard for us to chase every platform,” he said. That Epix, started just under five years ago, doesn’t make its own original TV content, meanwhile, hasn’t hurt or helped it in closing distribution deals, he said. Lionsgate, one of the companies that owns Epix, creates original TV content and he’s “really excited to see” what TV content it will provide to Epix, he said. Rensing also predicted that Apple won’t start producing its own original TV content.
Smart TVs and streaming set-top boxes can coexist on the market, said LG’s Durgin. “I'm not sure it should be the goal of the smart TV to replace the set-top box,” he said. “From an LG perspective, we're very happy with our partnerships” on smart TVs, he said. LG’s purchase of webOS open source software early last year and its implementation of that software in its smart TVs has created the ability for users to “seamlessly switch” between their content across multiple devices, he said.
Roku, meanwhile, continues to integrate its operating systems on smart TVs from multiple manufacturers, in addition to marketing its own streaming devices, said Rosenberg. “We don’t look at the set-top and TV business as an either/or” conflict, he said. Roku will continue to “play directly in the glass part of the business” because it thinks it has “something to add” there, he said.
More U.S. TV viewing will be non-linear in nature than linear by about late 2020-2021, predicted Joel Espelien, senior analyst at TDG Research. There is “heavy migration” from TVs being used in bedrooms and other secondary rooms of a house to tablets in the U.S. and other markets, he said. There’s “significant cannibalization” of bedroom TVs by tablets, he said.