Washington Post has a great interview with Jim Funk of Roku. I met Jim when he was with Akimbo, an over-the-top video effort that didn’t survive. I tried Akimbo’s box and gave up after 3 days, but I love love love my Roku box. If you are interested in how internet video moves to the living room, this is a good read:
What’s holding back the online video market and Internet over the television?
Funk: We’re still early in a lot of ways. When you see something is possible, then you wonder why we aren’t there yet. We’ve seen a lot of PC-delivered video that can deliver high quality video over the Internet to people’s homes. So it’s entirely technically possible to put video over Internet to the PC. If we were sitting here three to four years ago, we would be saying same thing – why aren’t we there yet? Sometimes it just takes time to get there. Don’t be impatient.
But why? And what are the market forces in play that are determining how the online video market will shape up?
Funk: First, it’s because of technology, how to make a simple and good user experience and how to make it reliable. A lot of people are inventing in networks and servers to make it smooth. Every generation of products are made to make it better.
The second issue is the business model. If you look at networks and cable networks, they have a lot of infrastructure and shows that are expensive to use. Revenue to do that comes from today’s model from the cable and satellite bill. They charge an amount per month to a content owner, and the content owner inserts advertising. The model on the Internet doesn’t have the same subscriber base and revenue. For them to take all existing shows and move to the Internet would potentially result in at least near term a significant drop in revenue. That is changing, but that comes with growth of audience. And it comes with better technology and getting advertising and maybe a better business model. But those things are being worked through, and it’s up to the content owners to make business decisions.
The third reason is consumer behavior. Even though online video is popular, people watch TV or DVR (digital video recorder). All those things are changing really fast, though.
How will you compete?
Funk: At the end of the day, we are competing with other entertainment choices. Whoever owns a content company, they have to ask: Do I want to maximize success of content or go for the consumer? And they would say maximize content.
The co-owners of Hulu in some ways are in competition with broadcasters, but they say this is a consumer choice. We don’t want to be like the music industry. So the trend is certainly unstoppable. We will be open to anyone. There are hundreds of thousands of (our) boxes installed and users using them. Consumer choice is an amazing thing.
Post Tech – Chat with Roku on hurdles to online video market
