Ars Technica
TV streaming platform Roku is looking to move beyond dongles and software deals to make its own TV hardware, according to a report in Insider.
The story appears to be based on two sources with different levels of familiarity with Roku’s plans. The first is someone who has participated in a Roku focus group. “They showed different models, feature sets and names, sizes, price points,” said the participant.
Second, the article quotes a director who says that making TVs has been on Roku’s roadmap for over a year. The director is quoted briefly and gives a little more detail by saying, “The analysis is done. They recognized it made a lot of sense to own the last bit of branding, especially if you’re targeting content.”
The report claims that Roku has been propelled toward this strategy, in part because of the supply constraints that have hit consumer electronics. In the company’s latest earnings call, the chief financial officer said supply constraints in the TV market were a factor that prevented the company from meeting its subscriber growth targets.
Roku used to be best known for its dongles and streaming boxes, but consumers have moved away from those devices as they increasingly bought smart TVs with built-in streaming apps. In recent years, Roku has been making more and more money by selling its smart TV software. In fact, Roku’s operating system is the number one operating system for smart TVs. Roku also gets a discount when its hardware or software redirects subscribers to Netflix and other streaming services, and the company monetizes ads and user data.
A move to TV hardware would allow Roku to take a bigger slice of the pie and build a stronger, more direct connection with its users and customers. However, TV hardware is a challenging venture with small margins compared to the worlds Roku currently operates in. This risky new path wouldn’t necessarily be a slam dunk.
When reached for comment, a Roku spokesperson told Insider that the company will not comment on rumors or speculation.
