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Week In Review: Underdog Roku Pulling Away From The Pack; Amazon Raises Antitrust Hackles Again

1. Underdog Roku Pulling Away From The Pack

Yet another study, this one from Parks Associates, shows that Roku is pulling away from the competition and is set to dominate the streaming device market. Following in the footsteps of studies from eMarketer and ComScore, the results, which more or less mirror the previous two studies, are hard to ignore.

That’s all the more impressive given that Roku’s three main rivals are three of the world’s largest tech companies—Amazon, Apple and Google—all of whom have a vested interest in dominating that market as a way to help advance their TV goals.

Why It Matters

Incredibly enough, Roku’s success is not a mystery or the result of some brilliant and unique innovation. Their rise is due to the fact that they have the most user-friendly interface and the largest selection of channels.

Period. End of story.

I have tested all four devices along with my two teenagers. As a result, we have Rokus attached to all three TVs.

Apple TV’s interface is clean and arguably as good as Roku’s but it doesn’t have the channel selection (until recently it lacked Amazon) and, more important, it’s three times the price of Roku. That’s a deal breaker for most people right there.

Chromecast is cheap and easy enough to use, but the lack of a unique remote was the deal breaker there: my kids would start using their phones for something else and then forget which app they’d launched the show they were watching from when they needed pause or rewind. They found that incredibly frustrating. A quick Google search on my part revealed that they were far from the only ones.

Amazon tried, but the interface still looks really Microsofty, like it was crafted by engineers rather than UX designers.

What’s really crazy though is that the Roku’s interface is good but not great. You don’t ooh an ahh over it. It’s very functional, easy to use and understand and they did a great job with the companion iPhone app which doubles as a remote for those times when the actual remote is playing hide and seek in the couch cushions.

But the point is, it’s not unbeatable.

And yet despite that, none of the three giant tech companies has been able touch them, or come up with anything even remotely competitive.

Apple in particular lags well behind the pack. They do not seem to have learned the lesson that you can only charge a premium price when you have a premium product, and there’s nothing premium about Apple TV, certainly nothing that would warrant a price that’s three times the competition.

Which is why Roku’s market share is double the size of Apple’s.

What You Need To Do About It

If you’re a TV network or vMVPD, FFS, stop building your apps for Apple TV first. Build them for Roku. They’ve got the biggest chunk of the market and they’re only getting bigger.

If you’re an MVPD and you’re considering launching a vMVPD, try getting together with Roku. A free white label Roku stick will make you very popular with your audiences.

If you’re an advertiser, look into running some ads on Roku. They have a sophisticated ad serving platform that can let you experiment with addressable on many of their apps and the cost is low enough to chalk it up as experimental budget. Every advertiser should be experimenting with addressable TV advertising right now–it’s where everything is heading, and it’s better to be informed and do your learning now, while you still have time to experiment.


2. Amazon Raises Antitrust Hackles Again

Amazon announced that they’d be making some tweaks to Whole Foods starting on Monday, including lower prices on food (cue the “half-paycheck” jokes) and special deals for Prime members.

This is great news for consumers, but not very good news for Amazon’s competitors, as the announcement sent grocery stocks plummeting.

Why It Matters

As we’ve noted here previously (and as the always excellent Wall Street Journal CMO email noted this morning) there has been a lot of smoke from both the right side of the political spectrum and the left about the virtual monopolies the tech giants have created and how those monopolies need to be broken up.

Since Amazon’s business model (they sell things) is easier for Washington’s tech-unsavvy politicians to understand that Google’s or Facebook’s, they are widely regarded as target number one.

And while the original thinking was that nothing of the sort would happen under the current administration, Jeff Bezos owns the Washington Post, Donald Trump hates the Washington Post, and so all bets are off.

Since Amazon does not intend to stop with Whole Foods, we can expect this issue to resurface again soon and slowly gain traction. Not enough to be a real issue, in 2018, but soon.

What You Need To Do About It

Not much to do right now other than monitor the situation, keep an eye on politicians other than the President bashing Amazon, and don’t buy grocery stocks.

While Amazon, Facebook and Google have all been good corporate citizens thus far (for the most part), the potential for malice is still there, and we predict that it will become a major political issue sometime in the next three to five years.