Will Roku's Amazing Success Continue?

It took Roku 15 years from when the company was launched in October 2002, to become the most popular media streamer on the planet.

At that time, no one was renting or streaming content from the Internet. The VHS market was flourishing. Video rental stores were on almost every street corner. The iTunes Video Store and Apple TV did not come along until January of 2007 when it made its first public debut at Macworld Expo.

At the same time Apple unveiled their new Apple TV, Netflix also announced it would be renting and streaming movies directly to computers for the first time. The streaming media revolution was born.

Consumers fell in love with the idea of being able to rent videos from the comfort of their homes without rewinding and handling sticky VHS tapes or returning them the next day. The Apple name, along with an easy to use interface and quality hardware quickly helped push the Apple TV to the front of the line in media player sales.

Meanwhile, Roku the little startup had a vision of their own. They wanted to become one of the most consumer friendly streaming devices of all time. Except they had no content of their own. They were dependent on the content of others to make their media streamer worth using.

They had a free and friendly public channels developer program along with private Roku channels that quickly made the platform home to channels of all kinds. Churches, Roku Adult Channels, and channels about goats, all were welcomed and found a place to call home on the Roku platform.

Big media companies came to Roku as well, Hulu, Netflix, Amazon, and Vudu all brought their movies and shows.

Later, faced with sagging subscriber numbers big cable TV companies like DirecTV, Dish, Charter and Comcast all offered streaming versions of Live TV as well. This even brought some new Live TV providers to Roku as well like YouTube Red Live, Sony Playstation Vue and eventually Hulu Live TV.

The lure of watching unlimited streaming televisions for a low monthly fee. Quickly made many cable TV customers realize they could save hundreds and even thousands of dollars every year.

After dumping their expensive cable TV or satellite subscriptions, they came to Roku by the millions.

Roku continued to innovate offering a wide range of media streamers at each price range. From as low as $30 for a entry level Roku table top model. To models built into televisions costing several hundred dollars.

The Roku public channel store exploded, from just a handful of channels to now over 4,000. Along with almost 1900 private channels as well.

Other companies like Google and Amazon tried to duplicate Roku's success by launching media streamers of their own. Sales of Amazon's Fire TV streamers and Google's Chromecast casting stick took off as well.

Stormy Waters Ahead

Pirates also jumped aboard the Roku platform. Some Roku channel developers began selling subscriptions to copyrighted movies still playing in theaters, and live TV shows.

The pirate content was not just limited to Roku. Amazon Fire TV sticks flew off the shelf for this reason as well. Most buyers used these sticks to install Kodi to watch free movies and current TV shows and even live TV.

Cablevision, which is one of the largest cable operators in Mexico. Felt threatened enough by their shrinking market share of cable TV subscribers they petitioned the courts to ban all sales of Roku devices in Mexico and won.

While the case is still pending in the appeals courts, Roku now had a stigma attached to their brand which they needed to overcome.

All along Roku would remove private pirate channels that were reported for copyright violations. Often they came right back again using a new developer account and a different code. Now Roku has begun cracking down even more. Much to the displeasure of some of their customers who apparently purchased their Roku media players with the only intention of watching Free TV.

Roku began adding a disclaimer every time someone wanted to add a private Roku channel. Roku warned their customers that private channels found to have copyright content could be shut down. Many developers who had these channels left the Roku platform in favor of Android TV boxes where these restrictions are much more relaxed.

Will History Repeat Itself?

Remember Apple TV? Which once was the number one selling media streamer. They also clamped down on its users by blocking jailbreaking, a technique used to open their device to 3rd party apps like Kodi. They soon fell far behind in sales.

Unfortunately, it is piracy that drives many sales of media streaming devices. Fortunately, most people that pirate content also subscribes to some form of paid streaming service as well.

Roku is now at cross roads, clamp down too hard and they risk alienating many of the very customers that helped push them into the number one spot. Don't clamp down enough, and they risk losing content providers and could face more bans in other countries to sales of their devices.

All this comes at a time when Roku is getting ready to launch a new IPO which will make stock market shares available to the public for the first time.

Can Roku Continue To Innovate?

Some content provider channels on Roku are beginning to look a bit dated and look better on competing platforms. A major software refresh is in the works and channel developers have been warned to update their channels by January 1, 2019, or their channel will cease to work.

We love the simplicity of Roku and the many great features they have brought the streaming community. The line between success and failure is very narrow. Hopefully, Roku continues to innovate and never forgets the magic formula that made them great.

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