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Amazon Deal Boosts ‘Over-the-Top’ VOD

Mar 8, 2009  •  Post A Comment

Cable alternative Roku snagged a big win last week by inking a deal to deliver Amazon video-on-demand content, a deal that Roku says is the first of many new partnerships it will form with content providers in the next few months.
Roku offers a set-top box that delivers some movies and television shows to TV sets, representing direct competition to cable operators.
The service launched a year ago with Netflix as its charter partner and has quickly emerged as one of the leaders among the so-called “over-the-top” players. That’s a term for companies that seek to bypass cable and satellite companies by delivering programming directly to consumers on their TV sets using broadband connections.
Growing the Business
Although it’s still small potatoes, Roku has nabbed more than 100,000 customers for its $99 box and says the number of customers is growing each month.
“We want people to be able to cut their cable and get what they want to watch directly on our box,” said Tim Twerdahl, VP of consumer products for the company. However, cord-cutting is not mainstream yet and Roku has a ways to go. In fact, a number of recent reports suggest consumers are not ditching their cable service in favor of online video viewing.
Roku faces competition, too. Other cable alternatives including Sezmi, Vudu and AppleTV all are angling for a piece of the business. Apple reported that first-quarter unit sales for AppleTV had tripled year-over-year, but the computer company declined to reveal specific numbers. AppleTV brings iTunes content to the TV set, enabling consumers to watch TV shows, podcasts and movies on their TV sets.
Access to the iTunes service is important for an alternative provider, as is access to Netflix and Amazon. With the latter two on board, Roku has snagged two of the most important players in today’s fast-changing content ecosystem that together bring more than 50,000 movies and TV shows to Roku’s service. In addition, both Netflix and Amazon have been outperforming the market, reporting higher-than-expected numbers as they evolve into critical players in the programming business.
Competitors Trailing
Competitors Sezmi and Vudu may need to play catch-up.
Sezmi completed a technical trial of its service late last year and has not announced a launch date for its cable-alternative service.
Vudu has been in the market for more than a year with its $149 box that offers more than 13,000 movies and TV shows, many in high definition. The company has not released data on the number of boxes sold.
Then there’s ZillionTV, the latest cable alternative. ZillionTV last week launched its set-top box service, which also relies on Internet access to deliver premium content from Hollywood studios Warner Bros., Sony, 20th Century Fox, Disney and NBC Universal, all of which are stakeholders in the service. ZillionTV plans to sell its system through Internet service providers.

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