Roku CEO: OTT is changing the content delivery game

SANTA CLARA, Calif.--Anthony Wood, CEO of Roku, opened the third-annual OTTCon by saying over-the-top delivery of content is changing the playing field of how content is delivered and consumed.

Wood, speaking to the largest audience the conference has seen since its launch, said content owners and providers have embraced the Internet as a method of delivery, and consumers have continued to look for new ways to access it.

Wood's who founded and is the CEO of the OTT set-top-box vendor, said more innovation is happening in the space today than ever before, and added that an array of content providers, from the smallest content producers to the largest content owners.

"When I talk about the future of TV, I'm not talking like the Matrix, future of TV," he said. "I'm talking more about the next couple years. The Internet is creating a lot of opportunity and a lot of risk for companies in the space."

And, he said, the change in content distribution models is being driven by content.

"As the number of channels grow--there are almost 500 on Roku now and a new one is being launched almost every day--viewing has [to] grow," he said. Roku has seen its viewing time increase from six hours a week to 12. He added, And I think it's going to continue growing until it reaches 35 hours, the average that viewers watch today."

Roku's Top 10 channels (in order) include Netflix, Pandora, Hulu Plus, Amazon, Crackle, HBO Go, Angry Birds, Disney, NBC News and GBTV. But Wood said those numbers change as new content is introduced.

"As more content comes over the top, this list will continue to change," he said.

Wood said Roku regularly is asked "when will I get HBO and ESPN on my Roku, and when can I get ESPN without all that other stuff?"

HBO Go, he pointed out, is available now for authenticated subscribers.

"That's a trend we're starting to see and I think it will continue," he said. "ESPN, I'm sure, will come on that kind of basis soon."

But an à la carte ESPN?

"The answer to that is almost never," Wood said. "The economics are based on bundling. I don't think that'll change any time soon."

But, he said, there may be more bundle options available to consumers soon.

"I think we'll see a lot of that over the next few years," Wood said, adding that consumer prices are likely to come down as well.

Wood said an even bigger question is, who's going to offer the first true virtual cable?

"It hasn't happened yet, but there's a good chance it'll happen this year. There's a little bit of hesitation among service providers to be the first one to go," but he said a lot of them are thinking about it. And, he said, it will most likely be an existing provider, rather than a new player like Intel.

"They already know how to negotiate contracts and rights," he said.

Wood added that while game consoles and PCs today are leading in streaming hours, primarily because there are a lot of consoles already deployed, smart TVs and inexpensive streaming players like Apple TV and Roku boxes are likely to make up the new order.

"Gaming consoles as a percentage of streaming is declining," he said, as other devices gain.

Another change, he said, is that content owners are starting to choose who they think will be winners. HBO Go, for example, launched on Roku, Xbox and Samsung TVS.

And the longer term future?

Wood predicted that Netflix is likely to pass 50 million subscribers, the DVR will die, there will be more streaming programming and much of that will stream direct to most TVs.

Related articles:
MSOs pick ClearPlay for on-demand video to subs via TiVo, Roku
Roku starts taking pre-orders in UK, Ireland; hopes to ship by end of month
Showtime teams with Roku, Brightcove on OTT sample
Encoding.com rolls out presets to make Roku channel development easier
Roku adds Epix as its first authenticated channel

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