Roku Lowers Prices; How Long Before it's "Free"?

Roku announced today that it is lowering prices on its Set-Top-Box from $79.99 to $59.99 for its SD version and from $99.99 to $69.99 for their HD-XR model which will soon be capable of 1080P HD. These reductions are to make it even more competitive with forthcoming STBs from Google, Apple and others, but it begs the question when will we start to see them be offered for free?

Bundle a device with several subscription products offered on the service like MLB.TV and UFC channel, and it’s probably worth Roku’s while to offer it at a further discounted rate or even for free a-la the subsidized rates offered for cell phones by mobile carriers.

When it comes down to it the content is the most valuable part and the platform and software doing the work encoding/decoding and delivering the video is second. Hardware is inconsequential, over-the-top device manufacturers are only a middle game. TV manufacturers are already beginning to turn their devices into powerful computers which can run this software – VUDU has already ceased manufacturing devices for this reason, focusing on software which can be bundled with TVs and they’re a major player thanks to their acquisition by Wal-Mart.

So Roku, AppleTV and GoogleTV can duke it out in the hardware market for a bit, but selling set-tops is a losing proposition. They should give them away for free, build a paying subscriber base, focus on content first and foremost and the underlying technology to provide the best user experience – this is where the battle will be won.