Roku setting up Amazon Channels-like subscription business, report says

Roku Channel
Roku now gets the better part of its revenue through mechanisms like advertising on the Roku Channel. (Roku)

Roku is setting up an a la carte distribution platform similar to Amazon’s successful Channels offering, Variety reports.

Citing unnamed sources, Variety said that Roku will establish a dedicated channel for subscription direct-to-consumer program platforms like HBO Now and CBS All Access, allowing users to authenticate, pay for and view content all in one place.

Roku sort of already does that. Users obtain access to services like HBO Now by downloading a “channel” (or “app”) in the Roku Channels Store, then signing up for the service directly through the channel or through the programmer’s website.

The new model would enable users to seamlessly toggle through all the services they subscribe to in one program guide that organizes their bundle. Payment, according to Variety, would ostensibly be consolidated as well.

Roku isn’t commenting just yet.

Roku, of course, got its start selling OTT boxes, and it still owns the biggest market share in that business. However, it is migrating its business toward monetizing its content platform through mechanisms such as advertising. The latter was a bigger revenue stream than the former for the first time in the first quarter, Roku said.

Amazon’s channels program, meanwhile, has “millions of subscribers,” according to Kathy Payne, head of content acquisition management for Amazon.

The Channels program has been watched closely by the pay TV industry, given its disruptive potential. Unlike virtual MVPDs, Channels represents a true a la carte unbundling of the pay TV ecosystem. 

Speaking at Fierce’s Pay TV Show last month, Payne said Channels “has really grown since we launched it two years ago. We’ve gotten a lot of really great feedback. People are tired of having contracts, and they’re tired of [pay TV] price increases. They’re tired of feeling out of control with the content they get to choose from. With Channels, they get to buy one or two or three channels, and really control what they’re paying for.”