Set-top video streaming boxes are still where it’s at, apparently, as the major players dig in to stake their claims. The latest is Roku which says it raised $60 million in new financing to expand in what becoming an even more competitive business than it was already.
Roku’s new bucks helps them expand into smart TVs, where it said earlier it was already heading. It has deals with major TV manufacturers to start shipping millions of TVs with Roku inside, beginning later this year.
This latest investment comes from Hearst Corp. and, apparently, Fidelity (That hasn’t been confirmed but Fidelity has been widely reported.)
Roku certainly is TV-friendly. According to SFGate.com two of the company’s previous investors are News Corp. and BSkyB.
SFGate says Roku says its “splits 90% of its overall market with the existing Apple TV,” but, just perhaps because Apple is Apple, a lot of observers think that’s the box to watch. In truth, Apple’s CEO Tim Cook hasn’t helped that perception much. This week, he talked about Apple TV like it was like a hobby, not a business. Fun, but not fully necessary. Still Apple has sold 13 million Apple TV devices; Roku has sold five million, so defining how things are split might be open to broad interpretation.
Where there is this much smoke, there must be some fire: Something is going to pop in a major your-world-has-changed way, and maybe this Roku deal was it. Or not. Amazon just announced it’s going to produce five new for-pay-subscribers only series and it appears to be getting into the box business; Sony has a natural supply stream for its Play Station, and Microsoft just announced a new Xbox and seems ready to be an even more serious player.
In fact, though, all of the OTT brands have been out there for awhile. Not one of them has seemed to get near critical mass or even mass brand recognition, or something more intangible—consumer desire. In fact, Investors.com speculates the trouble Hulu might be having completing its sale could be that there is so much turmoil in the streaming video market, with players as diverse as Wal-Mart and Netflix all in the mix.
Roku’s new money, especially coming from a media player like Hearst, seems to suggest that it’s going to try to make a statement. The investment almost doubles the amount of outside capital it’s raised. If it can get into TV sets at a time consumers are basically still a blank slate about OTT, it seems to be in a good position to determine what the next steps can be.