INTERACTIVE TV NEWS ROUND-UP (V): ROKU, WALMART, S3 GROUP, IRDETO

--Roku in National Retail Deal with Walmart
--S3 Group to Showcase StormTest Development Center at CableNET
--Irdeto to Deploy S3's StormTest Development Center Enterprise-Wide

Due to the large volume of news being generated this week by the Cable Show, we are covering today's stories in abbreviated round-up/summary form:

Roku has announced that its Roku XD player is now available in all Walmart stores across the US, where it is priced at $78. "With the Roku XD player now available at Walmart, customers can get dad the perfect gift just in time for Father's Day," Roku founder and CEO, Anthony Wood, said in a prepared statement. "Whether it's dad-centric flicks, sports or tips for grilling the perfect steak, Roku offers something for dad every time he sits down to enjoy TV." Roku currently offers around 250 entertainment channels on its OTT platform, and says that it will shortly begin offering popular casual games such as "Angry Birds."
S3 Group has announced that it will demo its StormTest Development Center automated set-top box testing solution at the Cable Show's CableNET 2011 technology showcase. "At The Cable Show 2011, S3 Group will test interactive applications, specifically those that support and validate EBIF specifications for interactive TV," the company states in its press materials. "Visitors will see StormTest Development Center in action as it is triggered by the presence of applications in the broadcast stream. With this approach, operators and service providers have the ability to conduct testing as the application is seen on air--allowing real-time confirmation of applications running correctly across the platform. S3 Group will also demonstrate its user interface for test creation which allows non-programmers to easily develop their own automated tests, along with a testing station for up to four STB's simultaneously."
S3 Group has also announced that it has secured its first enterprise-wide licensing deal for the StormTest Development Center: Irdeto, which has been using the solution in regional facilities for the past two years, has decided to deploy it throughout its global footprint. "Irdeto, a global software security and media technology company, conducted rigorous market and technology analysis prior to choosing StormTest Development Center as the platform for end-to-end testing of different features on multiple varieties of set-top boxes," S3 Group states in its press materials. "The company chose to expand with S3 Group due to its robust and reliable testing capabilities and multi-site support for engineers located in different countries."

Roku hits Walmart stores

Start-up connected set-top box (STB) company Roku has announced that its Roku XD player is now available in Walmart retail stores across the US. The set-top box has landed on Walmart shelves under its own Roku brand through a direct relationship with the big box retailer and not under a third-party OEM.

Both the mid-range Roku XD model and the company's top-of-the-line Roku XDS models are retailing at Walmart for $78 and $98, respectively.

All Roku STBs come with Roku's Channel Store of more than 250 channels, allowing access to not only Netflix Watch Instantly, Amazon Instant Video and Hulu Plus, but also a broad range of over-the-top (OTT) content, including Pandora, Major League Baseball's MLB.tv and, UFC.

Roku first ventured into retail stores when it licensed the Roku XD model to Netgear in late 2010. The third-party tech brand introduced the box and began selling it under the NETGEAR brand in retail stores including Best Buy, Fry's and Radio Shack. Phase-out of Netgear-branded Roku boxes has already begun as the partnership between the two companies ended in 2010.

A direct partnership with Walmart will allow Roku to expand beyond the early-adopters that have until recently has largely made up its customer base. Roku, as the original 'Netflix box', is not the only standalone STB seeking to establish itself within an increasingly crowded connected living room. IHS Screen Digest is forecasting connected standalone STBs in the US to reach approximately 5m total active devices in 2011, a remarkable 145 percent year-over-year increase. This will chiefly have been driven by Roku and the Apple TV. Importantly however, Roku and Apple TV do not offer the same proposition. The former is a true cord-cutting 'virtual cable' experience, offering a growing array of over-the-top (OTT) television networks, while the latter is at its core a media extender blending AirPlay and iTunes library streaming, direct iTunes rentals, and a limited number of OTT networks in a single low-cost proposition. Apple TV can be considered an evolution of Apple's Airport Express strategy rather than a direct competitor to Roku, which is selling stronger than ever despite Apple TV's launch. Indeed, Roku's key competition, so far ineffective, has been the Boxee Box, which is seeking to replicate the same model for carriage of OTT television networks.

Roku reached an installed base of 1m devices in the US by end 2010 and is on course to have an installed base of 3m STBs by the end of 2011. Meanwhile, Apple has reported selling over 1m of its $99 new Apple TVs three months after launch. Though Boxee has not yet released figures for its device, it is believed to be trailing Roku and Apple TV, despite 1.8m users of its software and services (including users of the free PC application).

Amazon was Roku's first distribution partner, and remains a chief supplier of programming to Roku's platform - this not only includes Amazon Prime Instant Videos (subscription), but also in its position as exclusive paid-VOD provider. The key question now remains whether this arrangement between Amazon and Roku will be challenged by Walmart, and also Best Buy, seeking to leverage their respective Vudu and Cinemanow paid-VOD services onto the Roku boxes carried in their stores. If Sony's Playstation 3 experience is to be a barometer, where the games console giant was leveraged by the retailers to carry both Vudu and Cinemanow on its device to the detriment of its own Playstation Store VOD services.

The key difference for Roku however, is that it does not push any single content service, and theoretically does not need to be vested in any single VOD platform. This puts it into a win/win situation in relation to the Amazon, Walmart and Best Buy competitive scenario, able to carry all the platforms for the promise of greater hardware distribution. In the end, which paid-VOD services gets carried on the Roku Channel Store may simply come down to a revenue proposition, and the question of which retailer can sell the most boxes for Roku. Ultimately, the choice of which channel or paid VOD app to actually install is the Roku customer's.