Roku's $99 player aims to be the hub for streaming movies

Roku is the company that makes the simply-named "Roku player," a $99 box that brings Internet movies and TV shows from Netflix and Amazon, and now baseball games, to your TV set.

"Roku" is also the number six in Japanese, and Roku CEO Anthony Wood chose it because Roku is his sixth company. He began selling homemade software in high school and college, and made his biggest stamp with ReplayTV, which beat archrival TiVo to the market by a few months with the first commercially available digital video recorder.

TiVo attracted better funding and marketing, and ReplayTV never caught on with consumers. It went bankrupt and is now owned by DirecTV.

But Roku's simple box, which sounds like a smaller idea, could potentially become even bigger than the DVR, tech analysts say.

If Wood, 43, has his way, the Roku box will be your conduit to anything entertainment-related — TV shows, movies, sports, music — all offered when you want to watch, not when a programmer decides it should be seen.

"The DVR was a stepping stone to where we're at today," Wood says.

His dream of a video jukebox has plenty of company. Apple, Samsung, LG and old nemesis TiVo share similar hopes, but their boxes cost more. The Roku box is $99.

"We focus on having a really low price, and being super simple to set up and use," Wood says.

The original Replay and TiVo units "came out before they were really ready, in terms of price," he says. "They cost us $1,000 each and were being sold for a lot less than that."

The Roku digital video player "costs us a lot less than $99 to make and we make money on every box." Wood won't say how many units the company has sold. Analyst James McQuivey of Forrester Research pegs it at 250,000, worth $25 million. Wood says his privately held firm is profitable.

A $100K undergrad

Wood was born in England, and spent most of his childhood in Atlanta and Houston. His dad was an engineer.

In high school he started a software firm to make programs for RadioShack's popular TRS-80 mini-computer and moved to the Commodore computing platform in college, with video editing software. He was raking in over $100,000 a year while at Texas A&M University when he learned he was about to be dropped because he had missed so many classes. He decided to close the company, study hard and get his diploma.

After college he created another software firm, iBand, this one to easily create websites. He sold it in March 1996 for $36 million ("my first really big win") to software powerhouse Macromedia, which changed its name to DreamWeaver. Macromedia got gobbled up by Adobe Systems. DreamWeaver today is considered the premiere software for making websites.

Then he got the idea about a VCR for computers. "I used to watch TV and record shows on my VCR, but it was a big hassle," he says. "I thought, 'I should try recording them to a hard drive.' "

The obstacle was the price of drives, which averaged $400 to $500 for 100 gigabytes or so. (Today, you can get a 1-terabyte drive — 10 times the size — for $100.) "I watched the hard drive ads every week, and when they finally got affordable, it got to the point where, yeah, I could really build this thing."

He started working on his company in June 1997 with initial funding of about $2 million from himself and a few investors. Shortly, he discovered there was another firm with similar ambitions —Teleworld, which became TiVo.

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