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Roku steps up Apple competition with new movie store, hardware

By Cliff Edwards and Andy Fixmer
Bloomberg News

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Roku Inc., the maker of set-top boxes that connect televisions to the Internet, announced Wednesday the introduction of new and upgraded devices that make it easier for viewers to rent or buy movies online.

The boxes provide access to an online store called M-GO, letting consumers use a single sign-up and log-in to order films and TV shows from different studios, Roku said.

Roku will also collect a cut of the sales.

The company is adding features and content to stay ahead of Apple Inc., its nearest competitor. Roku makes the most popular streaming products used by consumers to watch films and TV shows from subscription services such as Netflix Inc., according to researcher Parks Associates. With M-GO, Roku is offering sales and rentals as well.

“We want to give our viewers a one-click access to anything that’s available,” Anthony Wood, Roku’s chief executive officer, said in an interview. The agreement with M-GO marks the first time closely held Roku will get a cut of video download revenue, he said.

Roku, which has sold more than 5 million boxes in the U.S., makes four models that retail for $50 to $100. It has 37 percent of the market for such devices, according to Parks Associates, compared with 24 percent for Apple and its Apple TV product, priced at $99.

“Roku users spend more time streaming content than owners of other streaming boxes or video-game consoles,” Wood said.

The new devices feature an updated remote that delivers one-press access to Netflix, the largest subscription streaming service, the Instant Video service from online retailer Amazon.com Inc., Blockbuster on Demand and M-GO. The companies are paying Roku for the placement, Wood said.

M-GO is jointly owned by Technicolor SA, the majority investor, and DreamWorks Animation SKG Inc., the studio run by CEO Jeffrey Katzenberg.

Movies and shows from seven studios are available from M-GO the same day that DVDs and Blu-ray discs go on sale and can be watched on a variety of devices. World War Z in high definition can be rented for $4.99 for 24 hours or purchased for $22.99, according to M-GO’s website. Last season episodes of ABC’s Modern Family may be purchased for $1.99 each.

Purchases are stored online and can be watched an unlimited number of times through the Roku player. With the new products, Roku will also provide access to films that aren’t in M-GO’s library.


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