Roku announced today that its Roku XD player is available for purchase at Best Buy stores nationwide and at BestBuy.com. We spoke with Roku Chief Communications Officer Brian Jaquet at SXSW earlier this month, about the company's expansion in retail, user adoption, and cord cutting (which he prefers to call "cord shaving").
Roku made the first device to stream Netflix to the TV, and getting in front of more customers at retail stores, along with its pricing model, may just do wonders to help the company compete in this space with big brands like Apple and Google.
Users can watch content from sources like Hulu Plus, Amazon instant Video, Netflix, NBA, NHL, Revision 3, Twit, Blip.tv, and others. They're working to expand the content, and are putting more focus on news (even local).
"This has become a hot space because people are very interested in finding out more about these types of products," Jaquet told WebProNews. "We are really well priced and positioned in that regard, and we start at $60. It really becomes an impulse type of buy."
Best Buy availability should certainly help there.
"I think price and value are very, very important," he continued. "We are expanding our distribution. We're going to be in full retail this year. So now, when you go into the store - and we've sold over a million boxes, but we've been selling it direct to customers - they've had to go to roku.com or amazon.com - Now, you go into the store and you've heard about these new devices that stream content to the TV, and now you're going to be able to see it right there in the store. I think we've positioned ourselves really well against the competition in that regard."
Challenges in the Industry
"Part of the challenge is that there's a lot of competition - and that's a good thing and a bad thing," said Jaquet. "The good thing is that - take for example, when Apple released their new product last year. It immediately sold very well obviously, but our sales doubled as well. That recognized brand - that visibility to this new type of way you can get streaming, and get movies and TV shows beamed right onto your TV - it gives credibility to the whole space, and I think we benefit from that."
"We'll continue to have to execute," he acknowledged. "We have a great platform and great content on it today. We need to tell people about it, and part of gaining retail is expanding that awareness as well. We're going to need to invest a little bit more in our brand, so that people make Roku synonymous with this whole streaming space, and I think that if we can execute, we can still continue to be very, very successful, as we've already been."
"Simplicity is very, very key to adoption in what they want," said Jaquet of users. "We're trending towards a much older demographic, so less tech-savvy maybe. It needs to just work out of the box...a lot of our customers really value that simplicity."
He also stressed the importance of the content itself.
Cutting the Cord?
"We're seeing a segment of our customers cut the cable or reduce the services that they have with their cable provider, but really what a customer really wants - to take that big next step - is they want more content," said Jaquet. "They want a simple way to find it, to search for it, to discover it, and we're trying to address all those things."
"It comes down to what your viewing habits are - what kind of content is important to you....About 12% of our customers buy Roku to cut the cable cord," he said. "What are the biggest omissions though in cutting the cord? Well, it's local news or news in general, and there's some things that we're doing to address those. We're adding more news content (and actually more local news as well)."
There's another major factor keeping some users from getting rid of their cable.
"The second part also, is live sports, but also in-market sports," he said. "All of the sports things that are on our platform - let's say you live in Dallas and you're a Dallas Mavericks or a Dallas Stars fan...well Cowboys...we don't stream NFL yet...you can't watch local. So you're going to stick with cable or satellite or those types of services because you're an adamant sports fan."
"If you're not an adamant sports fan, with Roku, you can get new releases, you can get back catalog - you know - through Amazon, Netflix...you can get day-after-broadcast from your favorite TV shows through Hulu Plus for $7.99 a month, so it really is going to depend on viewing habits," he reiterated. "12% cut the cord. 25% either cut the cord or severely diminish the number of premium channels and services they have with their cable provider. We call it 'cord shaving,' not cord cutting..."
Even for those not looking to completely cut the cord, there are advantages of having devices that stream web content to the TV. On pricing alone, Roku should be able to win over some new customers through Best Buy. It's worth noting, however, that the $60 model of the Roku player is still only available at Roku.com. The XD model - the one available at Best Buy - is $80.