{"id":660,"date":"2015-09-13T23:18:51","date_gmt":"2015-09-14T03:18:51","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/how-little-roku-dethroned-the-big-apple-but-can-they-stay-on-top\/"},"modified":"2015-10-19T18:03:20","modified_gmt":"2015-10-19T22:03:20","slug":"how-little-roku-dethroned-the-big-apple-but-can-they-stay-on-top","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/how-little-roku-dethroned-the-big-apple-but-can-they-stay-on-top\/","title":{"rendered":"How Little Roku Dethroned the Big Apple&#8230; But Can They Stay On Top?"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-617\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/09\/roku2-1024x683.jpg\" alt=\"\" width=\"640\" height=\"427\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/09\/roku2-1024x683.jpg 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/09\/roku2-300x200.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/09\/roku2-600x400.jpg 600w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/p>\n<p>Apple released their digital streaming device (a set-top box that connects to a TV) almost 9 years ago. In January of 2007, the market&#8217;s need and desired features\u00a0of a set-top box were uncertain as the lines between TV and Computer were just beginning\u00a0to be blurred. In\u00a0little time,\u00a0AppleTV dominated this budding market. Back in 2007, Steve Jobs called it Apple&#8217;s\u00a0&#8220;<a href=\"http:\/\/www.engadget.com\/2007\/05\/30\/steve-jobs-live-from-d-2007\/\" target=\"_blank\">hobby<\/a>&#8221; business.\u00a0Unfortunately, they treated it as a hobby. Almost\u00a09 years later and short of the addition of some\u00a0content providers, little has changed for\u00a0this once forward-thinking product. With far less resources, Roku unseated Apple from the top of this important, thriving market.<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a><\/p>\n<hr \/>\n<p>&nbsp;<\/p>\n<p><strong>How Value was Created and Captured<\/strong><\/p>\n<p>The Roku was introduced in 2008, almost 2 years after the AppleTV,\u00a0when Netflix was outsourcing their ideas to spur\u00a0online media streaming. \u00a0The first generation set of devices (Roku SD, HD, and HD-XR) was a work in progress that saw technical refinements and a full revamping.\u00a0The Roku engineers\u00a0worked overtime to get the hardware right until it was\u00a0<a href=\"http:\/\/blog.streamingmedia.com\/2010\/10\/apple-tv-and-roku-go-head-to-head-heres-the-winner.html\" target=\"_blank\">poised<\/a> to take on the AppleTV. Their engineers also\u00a0carefully prepared the software to serve as a new platform for delivering a wide variety of content. While Apple controlled which &#8220;channels&#8221; were available to end users, Roku\u00a0opened its platform to all developers and all content providers. Today, they have nearly 2,000 channels in their &#8220;Channel Store.&#8221; Roku&#8217;s close relationship with Netflix was also fruitful; Netflix wanted the Roku in every household in America and assured the Netflix user experience on the box was seamless.<\/p>\n<p>Roku really began taking big bites out of Apple&#8217;s market share in 2011, outsold\u00a0the AppleTV in 2012, and comprised of\u00a0nearly half of all U.S. streaming media devices\u00a0in 2013.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-558\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/09\/11249-4028-141202-Streaming-l.jpg\" alt=\"\" width=\"660\" height=\"397\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/09\/11249-4028-141202-Streaming-l.jpg 660w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/09\/11249-4028-141202-Streaming-l-300x180.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/09\/11249-4028-141202-Streaming-l-600x361.jpg 600w\" sizes=\"auto, (max-width: 660px) 100vw, 660px\" \/><\/p>\n<p>2014 is more open to interpretation; while market share took a significant hit, Roku impressively remained\u00a0ahead of the pack, despite the entrance of two huge players, Google and Amazon.<\/p>\n<p><strong>Further Value Creation through Diversification<\/strong><\/p>\n<p>As the set-top box continues down the inevitable road of hardware commodization, Roku is continually looking at other ways to capture value given its position. Aware that software is eating the world, they began\u00a0licensing their\u00a0software to television makers. Additionally, they are looking at\u00a0white-labeled software and hardware to pay those TV providers who are adjusting to this technological shift in the industry. Lastly, lest we forget, Roku is making money on the actual content that flows through their platform.<\/p>\n<p><strong>The Road Ahead<\/strong><\/p>\n<p>Google and Amazon have\u00a0captured significant market share as brand new entrants. Apple has\u00a0now\u00a0re-shifted their\u00a0focus on the AppleTV as brand awareness of this category is surging.<\/p>\n<p>Unfortunately for Roku, a key reason they may have dethroned Apple was that Apple didn&#8217;t pay much attention to the AppleTV. Rumors swirled that Apple was working hard behind the scenes with potential Apple Television Displays, working deals with content providers, and\/or\u00a0working on an online TV service.\u00a0For whatever the host of reasons might be,\u00a0the AppleTV\u00a0saw little development, especially within the last few years. Many loyal Apple fans wondered when, if ever, Apple would open the AppleTV&#8217;s platform to all\u00a0developers.<\/p>\n<p>That has all changed. Last week, <a href=\"http:\/\/www.apple.com\/pr\/library\/2015\/09\/09Apple-Brings-Innovation-Back-to-Television-with-The-All-New-Apple-TV.html\" target=\"_blank\">Apple announced<\/a> a brand new AppleTV with a revamped tvOS and Software Development Kit\u00a0for developers. This will likely end up being a platform and software war which does not bode well for Roku. The tvOS is closely connected\u00a0to the very successful iOS software and will quickly see a host of applications\/channels from eager developers looking to come into your living room.<\/p>\n<p>Roku came at the perfect time to disrupt Apple&#8217;s almost lazy ownership of this\u00a0market, but they may have awakened the once-sleeping giant.<\/p>\n<hr \/>\n<p>&nbsp;<\/p>\n<p>[1] The AppleTV (available in nearly 80 countries) modestly outsells the Roku (available in only 4) worldwide. For proper context, this discussion will only focus on the U.S. market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Roku&#8217;s open platform, close relationship with Netflix, and seamless user experience catapulted them to King in the U.S. But will they persist?<\/p>\n","protected":false},"author":15,"featured_media":661,"comment_status":"open","ping_status":"closed","template":"","categories":[156,287,84,89,55],"class_list":["post-660","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-amazon","category-apple","category-google","category-roku","category-tv"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-winners-and-losers\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Little Roku Dethroned the Big Apple... 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