Roku signs Best Buy to sell its video players

Engadget is reporting that Roku has signed Best Buy to carry the Roku XD, its mid-priced model ($79.99 U.S.), in its stores. RadioShack will also carry the same model. Frys Electronics will carry the XD and more expensive XD|S model, and BJ's Wholesale Club will carry the XD|S. At the same time, Netgear has announced that it's discontinuing its rebranded version of Roku's player.

Roku's expansion into brick & mortar retail channels will place the brand on stronger competitive footing vs. Apple TV and Google TV, although getting its product into retail is only the first step in building consumer demand for the Roku brand. Apple TV holds a big branding advantage over Roku, and Google TV is considerably more functional. However, the XD is $20 less than Apple TV and around $200 cheaper than Logitech's Revue Google TV set-top box, so price-sensitive customers may go for the Roku, especially if store salespeople can demonstrate it effectively.

Roku to license its platform: The low-cost alternative to Google TV?

Engadget reports that Roku has begun licensing its hardware and software to consumer electronics companies. Its first licensee, Netgear, essentially repackaged the new Roku XD and is selling it at Best Buy, Radio Shack and Fry's. To date, Roku's market penetration has been limited by its distribution--prior to the Netgear deal, the only way to purchase a Roku set-top box was to buy it from Amazon or direct from Roku.

If you're a consumer electronics manufacturer, you can license the Google TV platform for free, but the hardware necessary to make it work is expensive: Consider that the least expensive Roku box sells for $59.99, while the Logitech Revue Google TV-compatible STB retails for $299.99. Even with a substantial licensing fee to Roku, consumer electronics manufacturers could add Roku capabilities to their HDTVs or Blu-Ray players for a fraction of the cost of the Google TV architecture. Shaving a few cents off the manufacturing cost of a product can make a big profit difference, and a Roku-based device has the potential to be much more profitable than one based on Google TV.

Even for manufacturers like Vizio who have developed their own Internet video capabilities, it may make sense to license the Roku platform and take advantage of its off-the-shelf ability to access Netflix, Amazon Video-on-Demand, Hulu Plus, Pandora, Major League Baseball, Vimeo, Sirius XM and many other content providers. Negotiating deals with content providers takes time and money, and licensing the Roku platform would allow these manufacturers to focus on manufacturing and marketing, not content acquisition.

Could Roku end up in as many devices as Netflix currently does? It's a real possibility.