Roku's Premium Subscriptions Highlight Importance Of Moving Beyond Hardware

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Roku is one of the select few that's seen massive success in the streaming device market, although the company's latest move highlights that software has now become more important than the hardware – Roku is now adding premium subscriptions to its The Roku Channel and making the Channel available on more devices. Once the rollout is complete, Roku users will be able to more easily sign up to watch content from a variety of premium providers, including SHOWTIME, Starz and EPIX, and access those from more devices, including their smartphones. In total, more than 25 providers will be initially available with Roku expecting to add more as time goes on.

This move also marks a fairly radical change from The Roku Channel's philosophy as since its inception, The Roku Channel has focused on providing free, ad-supported access to content. In principle, that is not changing with the same free content expected to remain free, but the difference being users of the service will now be able to pay to access additional content from a wide number of popular streaming services. The new premium subscriptions feature is set to begin rolling out in January "to select Roku devices' with the expansion of availability continuing throughout early 2019.

An ecosystem within an ecosystem

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Although designed to simplify the user experience, this is a more complicated setup at first as it is now clear Roku is creating an ecosystem within an ecosystem. Roku OS typically allows users to install apps and then log in to each app independently – just like Android and iOS. However, with this latest change The Roku Channel itself becomes a mini ecosystem which negates the need for the larger Roku OS ecosystem. Essentially, The Roku Channel is now moving beyond the larger Roku OS platform.

Users who might have signed up for SHOWTIME, Starz and/or EPIX would previously have needed to download the respective company's own app solution to access the content on a Roku device. With this approach, those users can simply consume the same content through The Roku Channel. There's no longer a need for a separate app and due to this singular approach, the same all-in-one solution applies to billing as Roku will be using the payment details on file to pay for the various premium subscriptions a user's signs up to. So again, users will not need to directly deal with any of the additional providers and instead can opt to have both content and payments routed through Roku's "Channel."

Following the Amazon model

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What Roku has announced here is not that different to the model used by Amazon with its Prime Channels solution with Prime subscribers also able to subscribe to content from additional providers through Amazon's ecosystem with the added benefit of having the content aggregated within the one 'app,' while also taking advantage of payments to one provider. While this makes sense when looking to improve the user experience, it's is also a highly beneficial model to the company – which is also which Roku has launched the new support.

The immediate benefit to Roku is that this will enable the company to ensure viewers remain within its app-based ecosystem – that's The Roku Channel, not Roku OS. This is an important distinction as the former is where the company will be able to control the viewing experience and related aspects, such as ads. Compared to the latter which when shifting user's over to a third-party's app solution, also shifts the user over to that third-party's experience, including ad generation and revenue. This method does come with some issues, however, and the first being provider support. Netflix is a prime example of one of the providers that is missing from the support list and one that will likely remain absent. As just like Roku wants to own the user experience, so does Netflix, and this will equally apply to any other provider who also wants to be in control of the user experience, from start to finish.

Moving beyond Roku devices

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Another issue, also semi-related to the control issue, is cross-device/platform support. One of the benefits of dealing directly with a third-party service is the ability to access the service from just about any and all devices, including smartphones. In spite of a recent expansion to the web, The Roku Channel has largely only remained accessible via a Roku device, and the issue with the within-access route is that it can have an impact on the ability to sign into third-party solutions on other devices. To combat this however, Roku also today confirmed The Roku Channel will be coming to the Roku Android mobile app, as well as the iOS app.

The update to the app is due to arrive later in January and with The Roku Channel support included, mobile users will be able to access the same premium subscriptions from a smartphone in the same way they will through a Roku OS device. This not only means current Roku users will not only be able to take their access, including premium subscriptions with them, but new users won't even need to buy a Roku device in the first place. In other words, The Roku Channel has now officially graduated from Roku OS.