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Roku has made, in my mind, a horrible mistake by trying to be more than a hardware vendor. My first Roku was great -- select the app you want, play video. A lot

Roku has made, in my mind, a horrible mistake by trying to be more than a hardware vendor. My first Roku was great -- select the app you want, play video. A lot of the streaming services were very immature and had terrible UIs; Netflix's was particularly good and Amazon remains one of the worst. They had a headphone jack on the remote (genius!) so that I could listen to content while other people in my household slept. Then on the next generation, they started requiring a credit card on registration (boy did I have to hunt to find out how to set it up without that). I am perfectly capable of getting credentials for the services in question, why would I ever put my credit card information with a service where I never expect to use it? Then they started peppering the UI with ads. The net effect here was basically just to make the interface less navigable by wasting a bunch of space advertising channels and programs on a device I paid for? Finally they added a bunch of buttons to the remote to take you to specific services, which I only every use mistakenly, and of course includes "Rdio", where all I get when that button gets mashed is a message saying "this service no longer exists". Their interface with the big tiles is very well done; I don't need these shortcuts. I would gladly pay extra for a version of the Roku that cut all of these features; like Amazon hardware and the "with sponsored content" where I can pay an extra $20 to get the vanilla version. It's still the best of the devices I've used (Amazon Fire Stick/Fire TV, Apple TV, Chromecast) but it's a shame they keep trying to suck more ongoing revenue out of it.

sithadmin 7y ago
It seems like nobody is content to maintain a commercial product that does one thing: play media well. Plex Media Server is now going down the same path: They're trying to do their own streaming services, be a portal for podcasts, have a partnership with TIDAL, etc. They recently hijacked the home screen UI to shill their library of completely awful TV shows and movies that nobody wants to watch (though it can be disabled easily). Seriously considering a move to Emby at this point.
- 293984j29384 7y ago
  Well, at least in Plex's case I'd assume it's to generate a reoccurring revenue stream to continue development. I question how sustainable the "Plex Pass" feature is with so many people (at least that I know) who bought a lifetime subscription ages ago. I personally bought a Plex Pass for like $49.99 around 6 or 7 years ago and hasn't given them a cent since then. I support their efforts like Tidal and ad-based TV and Movies if it means I get new features without having to move to a monthly or yearly based subscription service.
mattmcknight 7y ago
"suck more ongoing revenue out of it" I think there is also an ongoing cost to keep the software up to date, so there needs to be some ongoing revenue. It would be better if they just got referral fees for channel signups, or gave you a way to pay for no ads. Maybe the best bit is being able to quickly search for an item of content across the various services and compare prices. There should be also be referral fees in that bit, enough to keep them from having to be an advertising platform.
- andrewla 7y ago
  There is ongoing cost, sure -- that's why they don't stop selling new devices to interested customers, and making new versions of the devices to convince customers to upgrade. If they need to justify the ongoing cost, they should charge an amount that they can amortize over the lifetime of the device -- if they expect to get $0.50 in ad revenue per year from each customer (which seems ridiculously high) then that means the device has to cost ~$20 more to support that, which I'm totally okay with. Maybe not everyone would be, but at some point you have to rely on the fact that you're not selling a commodity device; you're selling something that is better than your competitors, or else why bother?
  - scarface74 7y ago
    So if they keep selling to new customers, what happens when all of the customers who want one have one? Once you have a box that can stream 4K, why upgrade? Besides there are no more dumb TVs. All TVs are smart and are “good enough” for most people. True Roku is embedded in most lowend TVs but the licensing fee is minimal because of the thin profit margins of most TVs. Roku is a commodity device. Everything with an internet connection can stream Netflix and the other services that people care about.
01100011 7y ago
Roku gets paid by Netflix and some other OTT providers, but it's nowhere near enough money to turn a profit. They need to sell ads to come anywhere close to making money. Their edge is that their software runs on really cheap HW, but it still costs money to manufacture and distribute. They probably lose a little money on every player they sell and make it back with ad deals and licensing agreements.
- andrewla 7y ago
  > "nowhere near enough money" ... "need to sell ads" ... "still costs money" ... "lost a little money" This is their choice of price point. They could move their price point and make that not the case. Why bother losing a little money on each player -- they're making the best product out there. What we're seeing here is a bunch of MBAs trying to squeeze the last tiny bits of profit out of the player to take advantage of their position as the market leader.
  - 01100011 7y ago
    > they're making the best product out there. I dunno, I like my Nvidia Shield. They know(from talking with them in interviews) that Android TV is a significant threat. Their advantage right now is existing user base and the fact that their stack runs on very cheap HW. As processors become increasingly more powerful at the low end, expect Android TV to make Roku irrelevant(barring another screw up from Google, that is).
    - scarface74 7y ago
      Google has been screwing up with Android TV for years. Do you really want an operating system embedded into your TV that has the horrible up date track record of Android? Besides, the Roku CEO said that they try to keep the build of materials for hardware embedded into TVs below $25. How long will it take Android TV to run on hardware that costs so little?
      - 01100011 7y ago
scarface74 7y ago
The problem with just being a hardware maker is that it isn’t that profitable - especially selling commodity hardware. We see it with personal computers, consoles (they make most of their money on first party games and licensing for third party games), televisions, phones, set top boxes, etc. The only really successful hardware company is Apple. Even Samsung is only profitable because of its component and manufacturing divisions. The extra $20 won’t help make Roku sustainable. Amazon can sell Fire sticks cheap because it is a gateway to their services.

sithadmin 7y ago

It seems like nobody is content to maintain a commercial product that does one thing: play media well. Plex Media Server is now going down the same path: They're trying to do their own streaming services, be a portal for podcasts, have a partnership with TIDAL, etc. They recently hijacked the home screen UI to shill their library of completely awful TV shows and movies that nobody wants to watch (though it can be disabled easily). Seriously considering a move to Emby at this point.

293984j29384 7y ago
Well, at least in Plex's case I'd assume it's to generate a reoccurring revenue stream to continue development. I question how sustainable the "Plex Pass" feature is with so many people (at least that I know) who bought a lifetime subscription ages ago. I personally bought a Plex Pass for like $49.99 around 6 or 7 years ago and hasn't given them a cent since then. I support their efforts like Tidal and ad-based TV and Movies if it means I get new features without having to move to a monthly or yearly based subscription service.

mattmcknight 7y ago

"suck more ongoing revenue out of it" I think there is also an ongoing cost to keep the software up to date, so there needs to be some ongoing revenue. It would be better if they just got referral fees for channel signups, or gave you a way to pay for no ads. Maybe the best bit is being able to quickly search for an item of content across the various services and compare prices. There should be also be referral fees in that bit, enough to keep them from having to be an advertising platform.

andrewla 7y ago
There is ongoing cost, sure -- that's why they don't stop selling new devices to interested customers, and making new versions of the devices to convince customers to upgrade. If they need to justify the ongoing cost, they should charge an amount that they can amortize over the lifetime of the device -- if they expect to get $0.50 in ad revenue per year from each customer (which seems ridiculously high) then that means the device has to cost ~$20 more to support that, which I'm totally okay with. Maybe not everyone would be, but at some point you have to rely on the fact that you're not selling a commodity device; you're selling something that is better than your competitors, or else why bother?
- scarface74 7y ago
  So if they keep selling to new customers, what happens when all of the customers who want one have one? Once you have a box that can stream 4K, why upgrade? Besides there are no more dumb TVs. All TVs are smart and are “good enough” for most people. True Roku is embedded in most lowend TVs but the licensing fee is minimal because of the thin profit margins of most TVs. Roku is a commodity device. Everything with an internet connection can stream Netflix and the other services that people care about.

01100011 7y ago

Roku gets paid by Netflix and some other OTT providers, but it's nowhere near enough money to turn a profit. They need to sell ads to come anywhere close to making money. Their edge is that their software runs on really cheap HW, but it still costs money to manufacture and distribute. They probably lose a little money on every player they sell and make it back with ad deals and licensing agreements.

andrewla 7y ago
> "nowhere near enough money" ... "need to sell ads" ... "still costs money" ... "lost a little money" This is their choice of price point. They could move their price point and make that not the case. Why bother losing a little money on each player -- they're making the best product out there. What we're seeing here is a bunch of MBAs trying to squeeze the last tiny bits of profit out of the player to take advantage of their position as the market leader.
- 01100011 7y ago
  > they're making the best product out there. I dunno, I like my Nvidia Shield. They know(from talking with them in interviews) that Android TV is a significant threat. Their advantage right now is existing user base and the fact that their stack runs on very cheap HW. As processors become increasingly more powerful at the low end, expect Android TV to make Roku irrelevant(barring another screw up from Google, that is).
  - scarface74 7y ago
    Google has been screwing up with Android TV for years. Do you really want an operating system embedded into your TV that has the horrible up date track record of Android? Besides, the Roku CEO said that they try to keep the build of materials for hardware embedded into TVs below $25. How long will it take Android TV to run on hardware that costs so little?
    - 01100011 7y ago

scarface74 7y ago

The problem with just being a hardware maker is that it isn’t that profitable - especially selling commodity hardware. We see it with personal computers, consoles (they make most of their money on first party games and licensing for third party games), televisions, phones, set top boxes, etc. The only really successful hardware company is Apple. Even Samsung is only profitable because of its component and manufacturing divisions. The extra $20 won’t help make Roku sustainable. Amazon can sell Fire sticks cheap because it is a gateway to their services.