1. Roku Finally Makes A TV Set

Having spent the better part of the last decade swearing they had no interest in making their own TV sets—despite a preponderance of industry analysts telling them they should actually be making their own TV sets—Roku decided to go ahead and roll out their own line of… TV sets.

This move is bound to prove highly confusing to consumers, especially the ones who own what they had assumed were Roku TVs, but were, in reality, TVs from Chinese OEMs like TCL and Hisense that licensed the Roku OS.

A distinction precious few of them are bound to understand.

Consumers are not really who Roku is looking to please here though. Their target is Wall Street and the advertising community, both of whom understand the distinction.

The question though, is will they actually care?

Why It Matters

So much to unpack here.

Let’s start with the basics of the announcement. 

Roku is going to be rolling out two different lines of TV sets, a low-end one called Roku Select and a high(ish)-end one called Roku Plus. 

This is already confusing. “Plus” (a) sounds like a new streaming service and (b) does not necessarily sound more premium than “Select.”

But I digress.

The lower end TVs, which will start at $199 are going to majorly piss off Hisense and other low-priced TV OEMs who sell sets with Roku’s operating system, as they will be direct competition.

As for the higher end sets, it’s still unclear what will set them apart from higher end Samsung, LG or VIZIO TVs, especially at a time when consumers have a tough time figuring out why one 65 inch 4K OLED TV is different from the next.

So there’s that.

There’s also the scale issue.

Americans replace TVs around every six or seven years. So barring some magical unannounced feature, the odds of significant numbers of people rushing out to buy a new Roku TV are pretty slim. Meaning that it will take years before they see any significant number of users. Which is an issue given that dongles are dying out as more and more people buy new TV sets with updated interfaces.

Then there’s the retail game.

Roku doesn’t have one.

Samsung, LG and (especially) VIZIO all do, which is how they succeed. In real world terms that means that unless Roku figures something out, retailers are going to stick those Roku TVs on a lower shelf in a deep dark corner while occasionally pulling them out and putting them on display in the front of the TV section in an attempt to get some of the aforementioned brands to pay up to ensure Roku is banished to that deep dark corner again. 

Welcome to capitalism.

So there’s that too.

Then there’s the fact that Roku is still fairly unknown outside the U.S. And that unless Roku is planning on a massive push into Europe or Latin America, that is likely to remain the case.

On the plus side, Roku revealed that they now have over 70 million active accounts in the US and Conviva’s data consistently shows them as head and shoulders above the pack.

So the question becomes whether there’s any real point in launching their own line of TV sets in 2023—just what do they hope to gain?

Industry consensus has long been that Roku is waiting for a buyer (Microsoft being the most commonly mentioned name as of late). So it’s unclear what the TVs help with in that regard other than cue the potential buyer into a potential new revenue stream they could eventually expand on.

Though I’d be shocked if they had not already considered that.

All in all, it proves the point we made earlier in the week that the TV OS wars are the key streaming TV story for 2023 and the one we should all be focusing on.

What You Need To Do About It

If you’re Roku, you’ve got a laundry list: ramp up your retail game, make nice with the companies that license your OS, keep up your international expansion plans, simplify your underlying tech stack, and (eventually) find an interested buyer.

That, and explain why the Roku Channel is not front and center of your interface, the way it is with all your competitors, where their FAST is front and center on their interface. 

Unless, of course, you’ve got data that says people prefer the current iPhone-like setup and that’s why you’ve got 70 million active users.

Stranger things have happened.

2. Comcast and Charter Roll Out Their Xumo TV Too

Once upon a time Comcast bought a well-regarded FAST called Xumo and was going to make it a key part of their streaming strategy along with Peacock, their subscription service.

But then the pandemic happened and the 2020 Olympics happened and Peacock had nothing anyone would pay for and so they decided to offer it up for free. And people seemed to like that decision, and so they kept the free version going even after the subscription version(s) came back to life. (There was good flywheel karma.)

That turn of events unfortunately left Xumo out in the cold—NBCU did not need two FASTs—and no one quite knew what would happen to them.

The answer came a few months back when it was announced that Xumo would form the basis for a joint Comcast-Charter TV OS that included a Xumo-branded streaming device (dongle) and Xumo-branded TV.

And this week at CES, said TV was finally introduced.

Why It Matters

The Xumo TV will be like the first generation of Roku TVs in that Xumo will form the basis of the underlying operating system for sets made by a Chinese OEM, in this case Element. 

That’s about all we know right now—nothing about price point or whether it is “Plus” or merely “Select.”

That matters less though than the fact that Comcast and Charter are rolling out their own TV OS and realizing how important that is to the future of television.

Xumo will provide an excellent base for the interface, and should give Comcast a good way to get a better understanding of how the whole OS thing works and how they can convert their MVPD subscribers.

They are, after all, the proud owners of the SkyGlass TV in the UK, which combines a pay TV subscription with a leased-like-a-smartphone TV.

Something they can possibly replicate in the US.

What You Need To Do About It

If you are in the industry, even more reason to be focused on the battle over the TV OS and why it is far more important than why SVOD services are cutting back on content production.

If you are Comcast and Charter, the SkyGlass model is intriguing and could help you retain and grow your customer base, especially if you throw broadband into the bundle.

If you are one of the other MVPDs, watch and learn.