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In the Future, All TV Will Be Streamed, Declares Roku

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All TVs will be connected to the internet and most or all content will be streamed to the home. That look 10 to 15 years into the future came from Steve Shannon, general manager and senior vice president of content and services for Roku, who delivered the second day keynote address at the Streaming Media West conference in Los Angeles, currently underway.

At the moment, there are 325 million connected devices in the U.S., with many homes owning multiple units. Additionally 47 million people will watch over-the-top content by the end of this year. That installed base number will grow to 538 million devices by the end of 2016.

"The switch is flipped," said Shannon.

While gaming consoles are by far the dominant devices for streaming video to the living room, Shannon says the console base isn't growing. Set-top boxes, on the other hand, are enjoying 80 percent year-over-year growth so far this year.

"It's not like people are running out to buy Xboxes to stream video," said Shannon.

In the near future, Shannon believes that connected TVs and set-top boxes will be the main two methods for streaming video to the living room. The set-top box market is currently a two-horse race, he said, between Roku and the Apple TV. Roku enjoys stronger sales in the holidays, he noted, since it has a $49.99 entry-level model.

Showing off Roku's current lineup, Shannon held up the Roku 2 XS, the Streaming Stick, and the just-announced 3M Streaming Projector.

"They're literally getting smaller all the time," said Shannon. He told of dazzling the ladies in his daughter's sorority by showing off the new 3M device. "I had this crowd of sorority girls checking out my little projector."

Steve Shannon, RokuIn the future, Roku will expand beyond set-top devices, building service inside televisions.

Roku currently has over 600 channels, Shannon said, noting that creating a channel has become democratized. Roku has about 35,000 registered developers. The most popular Roku channels (in order) are Netflix, Pandora, Hulu Plus, Amazon, Vudu, HBO Go, Crackle, Angry Birds (the game), and Disney.

Viewers currently stream 12 hours of video per week on average, Shannon, said, a figure he expects to grow to 30 to 40 hours, as most or all TV content comes from online sources.

The elephant in the room, Shannon observed, is whether or not this streaming is cannibalizing the pay TV companies. Cable and satellite revenues are strong and growing, and HBO Go is a pay TV success. By making it easy to get premium content on any device, he said, HBO has made people feel better about their monthly pay TV bills.

Pointing out work for the future, Shannon said the industry needs to build a streaming ad model, create a virtual MVPD (multichannel video programming distributor) offering customers more choices and better access over the internet for less money ("That's coming and that's going to be a great value proposition."), compete with piracy by offering more new releases, and package content in new ways to drive new sources of revenue.

Responding to audience questions, Shannon said that Roku will grow internationally, although he wouldn't give specifics, and said that the unified search introduced Monday would expand at some point to include more than only the biggest providers.


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