Wednesday, January 3, 2018, 10:38 AM ET|Posted by Will Richmond
Seeking to move beyond connected and smart TVs, Roku has announced its Whole Home Entertainment Licensing Program aimed at expanding into audio products. The program is meant to allow third-party manufacturers to build smart soundbars and smart speakers to connect to Roku TVs via Roku Connect software that runs in the home. Roku said that TCL is its lead OEM partner and will unveil its first device at CES (TCL is one of the original Roku TV OEMs as well).
In addition, Roku also intends to introduce the Roku Entertainment Assistant, which will be a free update to the Roku operating system. Both the assistant and the Roku Connect software will be launched this fall. The assistant will allow users to navigate Roku devices with voice commands and play audio even if the Roku TV isn’t even on. The assistant looks like it will be positioned as an alternative to Amazon’s Alexa, which has become an early leader in voice navigation.
The smart soundbar can work with any TV that includes an HDMI Audio Return Channel (ARC), although it will have features optimized to work with Roku TVs. The smart speaker functions either as a standalone device, or it can extend audio from another Roku device to additional rooms. The Roku Connect software can be licensed by OEMs for free and the hardware will carry a Roku Connect logo. Roku said it doesn’t expect licensing revenues from either the speaker or soundbar to be material.
Combined, the new software and audio products bolster Roku’s ability to compete with Amazon, Google and Apple, which are all pursuing whole home strategies, with varying levels of success. Amazon, with its popular Alexa voice assistant, proliferating array of Echo devices and top-selling Fire TVs is the furthest along of the three big companies.
Roku’s move to expand its OEM relationships means that its whole home strategy will mirror how the company has succeeded in smart TVs - by leveraging partnerships with third parties, rather than solely building its own devices. As this has happened, Roku’s licensing revenues have increased strongly. One piece of the whole home strategy that isn’t immediately apparent is how it contributes to video advertising revenues which have also grown in importance to Roku. However, Roku may have an audio ad strategy to follow as well.