DENVER—Just weeks after Time Warner Cable (NYSE: TWC) launched its TWC TV app on Roku's streaming video set-tops and devices, a Roku executive said the app is "going great guns" and getting lots of downloads. In addition, Roku is hopeful that other cable operators will follow Time Warner's lead. "We are in talks with a lot of different operators," said Steve Shannon, senior vice president and general manager of Roku's content division.
Speaking Tuesday at Light Reading Cable's "Cable Next-Gen IP Strategies: Entering the Zettabyte Era," Shannon said Time Warner Cable's TWC TV app--which delivers up to 300 channels through Roku set-tops and TVs connected to its $99 "Streaming Stick" devices--is an opportunity for the company to offer content to people who are already paying for the service. He added that the cable heavyweight plans to add a VOD service soon.
Shannon said Roku is talking to other cable companies and there are many different ideas being discussed but he believes the most common model will be for Roku to install apps for the operator. He added that some smaller Tier 2 cable operators are looking at Roku as a way to use the platform as a second room solution. Wave Broadband CEO Steve Friedman said at last week's ACA Summit that the company is offering subscribers the option of renting Roku set-tops for $5 monthly. Cablevisions' (NYSE: CVC) OMGFAST wireless broadband also leases Roku set-tops to subscribers in Florida for $5 monthly.
When asked if Roku could be a way for cable companies to act as a "virtual MSO" and deliver content outside their existing territory, Shannon said Roku would benefit from that strategy and he believes that if it happens, it will be from existing cable operators reaching into new territories instead of a third party trying to replicate what a cable company does. "I'm not sure that third parties have the relationships to get a deal done," Shannon said. He added that if the virtual MSO model does come to fruition, he believes companies may offer specialty packages that attract specific audiences, such as a package without any sports programming. "I think this will be more of an opportunity than a threat," Shannon said.
Interestingly, Shannon said only 15 percent of Roku customers are "cord-cutters" who eliminate their pay-TV services. He noted that the company is more interested in the other 85 percent of its customers who also have pay-TV services because they are more lucrative.
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