Roku Content GM Steve Shannon Outlines Company's Future

Steve Shannon, general manager of content and services at Roku, says the TV industry is on track to eventually deliver all video over the internet.

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Speaking at the 40th annual UBS Global Media and Communications Conference, Shannon outlined the strategy that Roku has been employing to capture a good share of the market of households wishing to digitally connect their TVs.

Many of the newer high-end TVs are sold as "Smart TVs," already connected to the Internet when sold to consumers, but Shannon says there is still room for consumers wishing to purchase stand-alone boxes to upgrade their TVs.  Currently, gaming platforms like XBox 360 hold the biggest share of this market, but Shannon believes that tomorrow's consumers will primarily be purchasing those platforms to play games, leaving opportunity for devices focused on streaming capabilities.

"Our product is becoming a stocking stuffer," he said. "During Black Friday, we averaged a sale of a new player every two seconds. Millions of players were sold ... Our CEO (Anthony Wood) says that next year, the goal is to sell one every one second."

Shannon also points to a five times increase in the number of TV streaming subscriptions between 2011 and 2012 to emphasize the trend of where consumers are going.

Roku has recently introduced a new player -- a streaming "stick" that connects to the HDMI slot of the TV. Roku is working with some of the lesser known OEMs to bundle the stick so that lower-end TVs can be internet-ready.

Shannon also points to another area of focus for Roku. "We're also investing heavily on the content services side," he says.

Roku, whose investors include News Corp. and BSkyB, already offers consumers over 600 channels including Netflix and Hulu Plus. Shannon touts that there's currently more content available through Roku than Google TV. But Shannon also says Roku is "busy cutting a lot of content deals" and that the core challenge going forward will be "understanding what content is out there and available for licensing."

Shannon says he doesn't think of Roku as a competitor to cable services and imagines that Roku might be able to also strike deals with many of these cable operators to potentially bundle the company's player. With five million Roku households, Shannon says that if his company was measured as a cable company, it would be ahead of Time Warner Cable. But he prefers to see them as "prospective partners," he says.