Roku targets UK as smart TV platform duel with Amazon hots up

TCL Electronics Holdings

07/09/2019 09:33

By Douglas Busvine
    BERLIN, Sept 7 (Reuters) - Streaming company Roku  ROKU.O ,
whose software runs one in three smart TVs in the United States,
is turning to the British market as competition with Silicon
Valley giant Amazon  AMZN.O  goes international.
    Chinese manufacturer Hisense  600060.SS  will market
televisions with Roku TV in the United Kingdom from the fourth
quarter, with other European markets to follow, Roku's founder
and chief executive Anthony Wood told Reuters in an interview.
    Roku started out offering players for services like Netflix
 NFLX.O , branching into licensing its operating system to
makers of internet-enabled TVs who have found it harder to keep
their software fresh and make money in a cut-throat market.
    The company floated in 2017 and its shares have since risen
more than tenfold as it grew to reach 30.5 million U.S.
households; struck licensing deals with nearly a dozen TV makers
and served as an aggregator for more than 7,000 channels.
    "We're the leader by a wide margin in the U.S., and we're
just starting to get serious about international markets," Wood
said on the sidelines of the IFA consumer electronics fair in
Berlin.
    The Hisense deal in the UK "is a stepping stone to the rest
of Europe", he added.
    
    TALKING TV  
    In Europe, Roku faces the might of Amazon  AMZN.O , which
unveiled a string of deals a IFA to bring its Fire TV platform
to living rooms, partnering with Grundig, JVC and Toshiba
 6502.T .
    One of the Grundig models will run on Alexa, Amazon's
digital voice assistant, making it possible to dispense with a
remote control and instead select programming by 'talking' to
the TV.
    Some high-end TV makers, like Samsung  005930.KS , still run
their own operating systems but for mid-range flatscreens a
platform contest between Roku and Amazon is emerging that echoes
the David-and-Goliath battle in music streaming between Spotify
 SPOT.N  and Apple  AAPL.O .
    Tech and media analyst Paolo Pescatore said there was no
guarantee that Roku's platform would prosper on the
international stage, because there are other ways to stream TV
in an increasingly mobile world. 
    "Roku is at a crossroads," said Pescatore. "If you want to
watch YouTube or Netflix, you just need a device."
    
    CHANNELLING CONTENT
    Thanks to its control of the user interface, Roku TV has
struck aggregation deals with a roll call of content providers -
including new arrivals Apple+ and Disney+.
    It is also making more money from digital advertising as
marketers shift budgets from commercial TV to streaming,
reflecting the cord-cutting trend among viewers.
    Revenues grew by 59% in the second quarter to $250 million
at Roku, which roughly broke even at the bottom line. The
company forecasts revenues of just over $1 billion this year.
    With Roku now aggregating more than 7,000 channels, it is
promoting its own Roku Channel that offers a recommendation
engine to help viewers filter the vast amount of programming on
offer to find what they want to watch.
    "Our goal is to be the leading streaming platform for
households," said Wood, seeing a future in which there will be a
few mega-streaming apps, like Disney, and much other content
will be syndicated into the platforms directly.

 (Reporting by Douglas Busvine;
Editing by Alexander Smith)
 ((douglas.busvine@tr.com; +49 69 7565 1271; Reuters Messaging:
douglas.busvine.thomsonreuters.com@reuters.net))