Roku eyes app bundling opportunity as next-gen aggregator
Roku is one of several TV operating system (OS) providers that believes it can grow share of time with consumers as a next-generation aggregator in an increasingly diverse premium video ecosystem.
With a strong focus on providing the OS and user experience on smart TVs, moving beyond its device heritage in high-quality streaming sticks and pucks, the company is working to surface content outside apps so that users do not have to go in and out of them to find content.
The evolution of out-of-app and cross-app content discovery has much in common with a modern pay-TV user interface. However, like other smart TV OS providers — from LG and Samsung to Google and TiVo — the opportunity is to become the default home screen for households without a pay-TV subscription, whether they watch only free-to-air content or subscribe to streaming services.
Super-aggregator
Roku sees an opportunity to compete with pay-TV and telecoms providers as a future bundler that can help consumers subscribe to a collection of streaming services at favourable prices — a function that is increasingly seen as part of what it means to be a “super-aggregator”.
Tom Price, content distribution director at Roku, has confirmed the company’s interest in subscription streaming service bundling in an interview with The Media Leader.
“The bundle has broken apart and who is going to put that back together,” he asks. “Three types of company can do that. Pay-TV operators have the content and the billing relationship with consumers and they will do this, but there is a limit to how far they can innovate without undermining their big bundle. Telcos also have a billing relationship and will try, but at heart they are engineering companies.
“Digital-first platforms who have billing integrations but not an existing pay business to protect can compete here. It is not easy to put the deals together to create bundles, but this is an interesting area for us.”
Subscription management
Roku already has its own subscription management capability, underpinned by Roku Pay, its proprietary payment platform that links to a customer payment method in the same way that PayPal does.
Viewers can subscribe to apps, rent films or purchase pay-per-view events via the Roku user interface once a content publisher has integrated Roku Pay into its app.
Roku Pay can handle free trial periods and discounted offers for apps, auto-renewal and plan upgrades. Roku customers watching paid content have three options: subscribe and pay directly via the content publisher; subscribe and pay through Roku but manage their subscription via the content publisher; or subscribe, pay and manage the subscription through Roku.
This payments capability means Roku is well-placed if it does decide to compete in the market for hard bundles.
Price agrees there is an opportunity to become a subscription bundler in free-to-air homes in the UK: “There are homes that will not take ‘full-fat’ pay-TV, but do subscribe to streaming video and music services, and may pay for a movie sometimes.”
This cohort is out of reach of pay-TV providers anyway, so the real competition for a smart TV OS thinking about subscription hard-bundling is likely to be other smart TV OS providers.
They will also be competitors to Roku in its efforts to be the primary source of content discovery in free-to-air homes, together with traditional free-to-air platforms like Freeview and Freesat in the UK. However, now that Roku has integrated its OS into TV sets rather than periphery devices, the company finds itself working with traditional free-to-air platforms at the same time.
Thus Freeview Play can be found on Roku OS smart TVs in the UK, making those TV sets more attractive to a typical free-to-air household.
Open to collaboration
According to Price, Roku is open to working with Freely to integrate this next-generation free-to-air platform (which comes from the same company as Freeview and Freesat, Everyone TV) into its TV OS. Price believes it’s an attractive idea.
Focusing on its aggregation role, Price points out that Roku historically provided a grid of apps, with consumers going into each to view content. Two features that are changing are What to Watch and Continue Watching, which arrived in the UK on Roku streaming sticks in 2023 and will soon be available on its smart TVs as well.
What to Watch provides recommendations based on a combination of popular content, the services a Roku user subscribes to and viewing habits. Continue Watching is a single location where viewers go to resume the shows and films they are currently watching. Both features encourage out-of-app discovery, although Price emphasises that Roku is happy for viewers to move in and out of apps, too, as they always did.
One significant user experience innovation that has yet to appear in Europe is Sports Zone, where Roku pulls together a wide array of sports content into a single location to make it easy to navigate. This helps users in the US to focus on the sports, leagues and teams they care about, even though that content could be spread across multiple providers (in the US, this includes ESPN, Fox Sports, Peacock, Paramount+ and NBC Sports).
Sports Zone offers tiles for different sports leading to live games and upcoming games, as well as a list of services where you can view that content, either free or with a subscription. Preview and highlights content, clips and sports documentaries are also flagged.
In the US, multiple sub-zones have been developed in collaboration with a sport or federation. NFL Zone launched in 2023 with the promise that people will “spend less time figuring out where to watch the game and more time rooting for their favourite teams”. The Motorsports Zone arrived in 2024 as a go-to location for Nascar, IndyCar, Formula 1, Formula E and more.
A Women’s Sports Zone, rolled out in 2023, has now been complemented by the National Women’s Soccer League Zone, which arrived in March to cater for fans of professional women’s football. The content curated within this area is found across NWSL’s US media partners, such as CBS Sports and Amazon Prime Video.
NWSL believes the enhanced discoverability on Roku will help grow its audience, while Roku points out that this kind of dedicated zone also amplifies talent.
Sports Zone European debut?
Sports Zone launched in Mexico in April and Price reckons a version could come to Europe, although sports rights are generally spread across fewer providers here, making exiting discovery easier. “We are actively looking at taking Sports Zone to more markets,” Price confirms.
That could include the UK — perhaps starting with a focus around a major sports event.
Price emphasises the role of Roku as an aggregator and curator rather than a content owner: “We are not trying to buy the sports rights, but we can create a user-friendly gateway to the sports people want to watch.”
On future device strategy, Price confirms that the focus is now on the smart TV, although there is still a strong commitment to streaming sticks (witness the new Roku streaming players launched in the UK in April, featuring improved Wi-Fi connectivity and new features).
“We see ourselves as an OS company — and that can appear on a television or a stick,” he declares.
The Roku OS is now found on multiple smart TV hardware brands in the UK, including TCL, Sharp, Veltech, Polaroid, JVC and Westinghouse. Recent model launches include the 4K Ultra HD JVC Roku TV, which is a QLED set in 43 inches and 50 inches, and a CHiQ QLED 4K range.
According to Price, Roku smart TVs achieve high net promoter scores and low returns for retailers. Because Roku OS was developed for use on low-cost TV devices, he explains, it runs very well on affordable sets.
He also believes that the Roku OS is helping to raise the bar — in terms of user experience — for connected TV on lower-priced TVs. That is something that benefits everyone in the connected TV ecosystem, including content providers and advertisers.