Ryan M Downey
There are a lot of tech bloggers and critics asking the question “Will Chromecast knock Roku out of America’s living rooms?” I don’t think so. The Chromecast gives consumers another product to consider and may start to carve out a niche unrelated to Rokus sollid second place spot behind Apple TV but I think it is far more likely to hurt the sales of lesser known streaming boxes far more and there are a number of reasons why.
First of all simply having a new product on the market that is being compared to Roku does not automatically vault it ahead. Roku CEO Anthony Wood said on a recent interview with Bloomberg News that when new products such as Apple TV have come out in the past Roku sales have increased. There has not been a new product rollout with as much hype as the Chromecast up to this point but keep in mind there are very few stories about the Chromecast that fail to mention Roku and a very important axiom in public relations and marketing is you want people to be talking about you. Streaming boxes or DMR’s are rarely if ever advertised on television. Information about them is usually found via a review when the product debuts. And the reviews often compare one product to another. So every time a potential consumer runs across an article about streaming with Chromecast they will learn about Roku. According to Wood this leads the consumer to take a good look at Roku. So far Roku’s sales are up from where they were before Chromecast hit the market.
The Chromecast can seamlessly “cast” Netflix, YouTube, Hulu Plus and Google Play movies and TV shows to a TV from a smartphone. For those unfamiliar with Google Play it is an on demand service where by the use may purchase TV Shows and movies to view similar to offerings by cable companies, Itunes, Amazon, Vudu, Blockbuster on Demand and others. Google does have a feature being hailed as “airplay like” when using a laptop or desktop computer while also utilizing the Chrome Browser. The feature called “casting” will beam your internet signal to the dongle in order to mirror video from a website such as Hulu.com or HBOGo. This feature is only available for laptop and desktop computers. While our experience with this feature went smoothly there are reports of audio either not sinking and worse not working at all. Another unfortunate problem is that if a website uses pop out screens for video content the Chromecast can not play the content. This means no casting from the phones and tablets that serve as the remote for this device. The casting functionality being limited to laptops is bad news for the many casual consumers who have left bulky laptops behind for sleek lightweight tablets.
Roku on the other hand is the only DMR with over 1000 apps in its included channel store specifically designed for use on its product. Apps included are standard bearers like Netflix, Hulu Plus, Vudu, Amazon Instant Videos, Blockbuster on Demand, Crackle, and many others along with Tech and game news sites like IGN, CNET News services like NBC, CNN, Fox News, children’s programming, weather apps etc. Roku does not have a YouTube app at this time but through an app called myvideobuzz, users can link a personal YouTube account to the app or search its vast library. There are hundreds of other private and third party channels developed for Roku by independent programmers to meet the needs and wants of its consumer base. A quick search of third party channels will populate page upon page of simple to add channels for a Roku.
The market may already be set
Another factor squarely in Roku’s favor is market penetration. Recent reports show that Roku is the most heavily used DMR on the market. There are close to 6 million currently in homes across the country and while there are over twice as many Apple TV units in homes the numbers indicate that Roku users utilize streaming far more often. The study also shows that Roku users stream more content than users of other streaming devices including Apple TV. That is 6 million people who can recommend the product to friends and relatives.
If Google wanted to make a major statement it would have been very helpful had the company been able to meet the initial demand. The positive press when it launched created an initial tidal wave that could have led to far more sales then it created due to lack of inventory. Will demand for the device dissipate once the buzz dies down? How many people would pay $100 for a Tickle Me Elmo today? As more reviews roll in from people who actually use the product the market will have a chance to see what this item can do.
Much has been made about the $35.00 price tag. It has been pointed out many times that this price point is 15 dollars less than the cost of the Roku LT, which is the lowest priced Roku model. Is this enough of a difference to cause someone to choose the Chromecast over the Roku LT? I don’t think the price point is as big a deal as it is made out to be. No, these have not been great economic times and something perceived as a cheap streaming option may seem tempting to some but keep in mind that the Chromecast has to be plugged in to an HDTV. So to start with, its consumer base is already willing to spend money on a perceived strong value. In the same Bloomberg interview mentioned earlier Anthony Wood pointed out that the $99.00 Roku 3 is the company’s best seller. It may be something that streaming enthusiast buy to add to an entertainment system but not an end all replacement.
If Chromecast can only be utilized by HDTV owners then the product is limited in its reach. While there are certainly many people who have moved past the old square television sets there are still plenty of people who have yet to make the move to HD televisions either for purely price driven reasons or because they are just waiting until their current TV’s stop working. Roku has multiple models that can be utilized by users with non HD TV’s. If people adopt Roku as their chosen streaming device than it will be considerably more difficult for Chromecast to win over those customers because they will already be comfortable with the Roku.
Something I find curious about the Chromecast is that it doesn’t ship with a controller. Google decided that their consumers should use smartphones and tablets as controllers. Like the earlier statement about HDTV adoption levels it is not a given that the entire American consumer base owns a smart phone or a tablet. And those who don’t are eliminated immediately from the consumer base for this product. By setting their product up as something that can only by utilized by smart phone owners with an HDTV they put a limitation on themselves that Roku has not.
Roku has a free app for Android and IOS that can be used to control the device. Once the device has been set up the physical controller can be put aside in favor of the mobile app. To pretend that using a smart phone as a controller is a new innovation is a step too far. What the lack of a controller does do is lower its shipping weight and packaging, which may even account for its lower price point. In some cases the controller adds other functionality to the device. Roku’s higher end models the XS (now no longer made) and its replacement the Roku 3 utilize the controller to play casual games things like angry birds, puzzle games etc. Roku does not market itself as a gaming console but this is sort of a bonus feature. The Roku 3′s controller also features a headphone jack in order to allow for a popular private listening mode utilizing the included headphones.
The Google Chromecast is a solid entry in to the streaming game for Google, its first product to catch the public imagination after failed attempts to get into the living room including the Logitech Revue, the Nexus Q and the Neo TV. For HDTV owners who also utilize smart phones the Chromecast is a nice way to add three new functions to an HDTV, Its ‘Casting” feature has potential for greatness but could use some tweaking.
Starting at its lowest price point the Roku line of products offers consumers a way to add well over 1000 channels spanning multiple categories with models to fit virtually any TV and be utilized by users with smart phones, dumb phones and no phones.
In the end the market will be the judge.