Roku Blazes Box-Free Path

Las Vegas – International CES 2014 - Roku is thinking outside the box…and the streaming stick (opens in new tab).

The company known for its family of streaming devices, is now pursuing direct integration with televisions with Roku TV, a platform that will start to ship initially on select TCL- and Hisense TVs this fall. Roku, debuted the platform tonight, didn’t disclose the precise economics of the strategy, but a company official confirmed that the company’s business model is a mix of licenses and revenue sharing from content and services delivered via the Roku TV platform .

Roku said its integrated TV platform will provide access to the 1,200 apps/channels delivered via its  Roku Channel Store to its family of discrete streaming devices. That lineup includes authenticated apps such as HBO GO, Watch ESPN, Watch Disney and TWC TV, Time Warner Cable’s TV Everywhere platform that streams in a mix of live TV channels and on-demand content.

The strategy should help Roku to expand its platform as competition heats up with rivals such as Google (through Android TV and its Chromecast platform) look to seal up direct integration deals with TV manufacturers, while also keeping a step ahead of Apple TV and those persistent rumors that Apple is working on a platform that can be built directly into televisions. Roku’s approach should also give TV makers a way to market a smart TV application platform without having to develop it and manage it from scratch.

LG Electronics, Samsung and Panasonic have built their own smart TV ecosystems, so it’s no surprise that they are not on the initial list of Roku TV partners. Roku, however, has existing relationships for several other TV manufacturers that are building or have built sets that are compatible with the Roku Streaming Stick. In addition to Hisense and TCL, those partners include Curtis, Element, Haier, Insignia (Best Buy’s CE brand), Oppo, Apex, Sceptre, and Polaroid, among others.

Roku said its initial Roku TV partners are ramping up their U.S. presence, noting that TCL is the world’s third-largest global TV manufacturer (12 million TVs shipped in 2012), and Hisense is fifth on that list (9 million units shipped in 2012). Roku anticipated that its new built-in platform will be offered on TVs in sizes ranging from 32-inches to 55-inches.

The Roku TV platform is matched with a simplified, 20-button remote control, as well as an app that can control the interface via iOS- and Android-powered mobile devices. Roku TV has also built in DIAL (Discovery And Launch), a technology that enables users to stream video from a mobile device to the TV.

Roku CEO Anthony Wood also announced Sunday on the company's blog (opens in new tab) that Roku had sold “just shy of 8 million Roku players” by the end of 2013 in the U.S. up from the  5 million announced last May. Roku has not released shipment figures for Canada, the United Kingdom and Ireland.

Wood also said the total number of streaming hours on Roku players grew by 70%, to 1.7 billion hours, in 2013.