What would you say if I told you most television watchers will shift their habit from cable and satellite providers to Internet delivery within four years? That's what Roku CEO Anthony Wood told me in a recent phone interview, and he should know. His company's devices are in a neck-and-neck battle with Apple TV for top spot in America's fast-growing streaming player market.
Of course, things are a little different in Canada. Most of the popular streaming services that run on Roku in the U.S. – like Hulu – simply aren't available up here. Consequently, we remain tightly tethered to traditional providers.
At least for now.
According to Mr. Wood, the best way to convince streaming content providers to bring their services north of the border is to present them with a robust platform with a big install base. That meant he needed to make Roku devices easily available to Canadians and then "just start selling."
Hence, the Canadian launch of two new streaming products: the Roku 2 XD and Roku 2 XS. I've spent the last week playing with the latter.
A big part of Roku's appeal is simplicity. Setup is a snap. Just plug the puck-sized square into the wall, jack it into your television with a composite or HDMI cable, and sign up for a free Roku account. You'll be up and running inside five minutes.
Once connected you can open the channel store and start adding services that stream content. At the moment, the most appealing of these for Canadians is Netflix. Its all-you-can-watch library is limited mostly to older movies and shows, but there's enough of interest to warrant its affordable $8 monthly fee, especially if you have kids.
Other services in Roku's 100-channel Canadian launch line-up are best described as niche. You can find sports services dedicated to baseball and hockey, American broadcast news services including CNBC and The Wall Street Journal, and lots of food and drink channels.
I asked Mr. Wood about services that may come to Roku Canada in the future, but he had little to say. Instead, he repeated that Roku's business model begins with getting its boxes into consumers' homes. "Our whole strategy is to drive a large scale of users and then use that base to drive more content partners," he said.
Indeed, that's exactly what Roku did in the United States, where the company's devices now host more than 450 channels, including HBO Go, Disney, Amazon Instant Video, Hulu Plus, and UFC. It's no wonder American cable providers see Roku as a threat.
Another piece in the streaming puzzle is bandwidth. When Netflix arrived in Canada back in 2010, avid users found themselves hit by big bills after exceeding their monthly ISP data caps. Netflix responded to customer concerns by lowering the default streaming quality of their shows and movies so that they consumed less data.
If Roku users want to be mindful of bandwidth, they'll need to manage video quality settings manually for each channel they subscribe to. It's a bit of a chore, but Mr. Wood mentioned his team was looking at the possibility of creating a global setting that controls the quality of all incoming streams, regardless of channel.
Of the two Roku models currently available in Canada, the XS is the fancier. It sells for $109.99 – $20 more than the XD – and comes with Ethernet and USB ports, as well as an upgraded remote that connects with the box via radio-frequency (at last, no need to achieve line-of-sight with an infrared sensor!).
The remote also contains motion sensors that enable an unexpected bonus feature: Games. The Roku 2 XS comes with Rovio's ubiquitous, blockbuster puzzler Angry Birds pre-installed, and using the remote's Wii-like motion controls to grab and fling the game's fuming fowls feels surprisingly natural. Other titles, including the tower defense classic Fieldrunners and trivia hit You Don't Know Jack, are available to purchase in the channel store.
But games are just gravy. What will make or break Roku in Canada is the company's skill attracting new content partners. Right now there's little to tantalize someone already running Netfix off a game console, and anyone interested in a broad selection of current mainstream programming is still much better off with Apple TV. It may be a closed platform limited to Apple's pricey iTunes store, but it has the shows and movies most people want to watch.
And Roku will need to hammer out deals with key partners sooner rather than later. The Internet is teeming with rumours about Apple's supposed smart TV project, and, if the success of Apple's other product launches in recent years serves as any indication, such a device could instantly dominate the market for streaming content – especially in a country like Canada, where the population has yet to significantly commit itself to another platform.
Roku has potential to become a mainstay in many Canadian living rooms, but the clock is ticking.