Roku Channel Store

With cable subscriptions declining and a host of nonlinear, IP-connected devices emerging to offer new, incremental revenue possibilities, the time has come for local TV to get serious about an OTT strategy. To capitalize on this opportunity at a market level, local operators should be asking, “what does an effective OTT strategy entail?” and “what steps can be taken today?”

Roku, an OTT set-top box provider with an open application environment and channel store for content developers to build on, is probing these same questions and thinks it may have the answer. Partnerships, curated content, revised workflow and advertising are all part of the solution.

Roku’s channel store already features a growing swath of audio and video content, including Netflix, Hulu Plus, MLB.TV, the NHL, Pandora and Roku Newscaster, which culls together a cross-section of news from national outlets. While sports and entertainment/drama are particularly appealing, Jim Funk, Roku’s VP of business development, told BIA/Kelsey that customers of the channel store have demonstrated “lots of interest in local stations.”

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In July, BIA/Kelsey projected that OTT homes — or those services providing linear and nonlinear video services over third-party bandwidth to the TV — will exceed cable homes by 2013. A February IMS Research report on “Internet Video to the TV” pegged 78 percent global growth in OTT devices, with 25 percent of American households able to display Internet video on TVs.

After a flurry of new releases and partnership agreements, device makers, middleware companies and content providers are catching up to — and justifying — these forecasts.

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The competitive tide is rising, seemingly by the minute, in the IP video/next-generation TV market. Apple, Amazon, Google, Microsoft, Netflix, Hulu, Boxee, Roku and Sony are just a few of the myriad brands competing to “cut the cord” on cable’s ironclad reign over this multibillion-dollar industry. Potential “killer apps” range from OTT set-top boxes to IP-configured gaming consoles to streaming video services to “connected TVs.” It’s enough to confuse even the savviest channel changer.

Monsoon Multimedia wants to simplify the user experience with Vulkano, a set-top box that unites a variety of functions within a single, sleek set-top box. Vulkano comes from the makers of Hava, a placeshifting platform that competed directly with Slingbox. But Vulkano aspires to be far more than a place shifter — it wants to be Slingbox, TiVo and Roku, all in one. 

Colin Stiles, Monsoon’s executive VP of sales and marketing, told BIA/Kelsey that the continued convergence of in-home communication (think “triple play bundling”) inspired Monsoon to craft a product with five key feature sets.

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Two freshly released viewer surveys underscore the fragmentation of the TV marketplace, the surging demand for online video and time shifting, and the changing consumer attitudes toward traditional, live television. 

The most recent Morpace Omnibus study reveals that while 52 percent of viewing is live (linear broadcasting, whether prerecorded such as a TV series or movies, or actual live programming like sports and news), more than a third (36 percent) of viewing is now on-demand. In addition to VOD services, 41 percent of consumers use in-home or network DVRs for additional “on-demand,” non-linear viewing.

Meanwhile, the migration online continues, with results from an Altman Vilandria & Co. survey declaring that broadcast TV consumption on the Internet doubled over the past year.

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