MLB beefs up Roku's rotation

In its bid to put together a roster of compelling content, Roku has just acquired an ace.

Starting Tuesday, the set-top box--known to many as "the Netflix box"--will begin streaming Major League Baseball games. As with the current Netflix arrangement, you have to be a subscriber to the service, in this case MLB.com Premium, to access the content that normally would be available only on a PC or iPhone.

And while this is a boon to baseball fans, it's an even more important development for Roku. MLB.tv Premium is the first live content available on Roku's device, and by bringing that from the PC to the TV, the 50-person Saratoga, Calif., company is beginning to differentiate itself from similar consumer electronics products.

Roku currently has access to the Netflix Watch Instantly queue, as well as Amazon Video on Demand, which allows for rental and purchase of movies. More recently, Roku added content from Blip.TV and MediaFly, two content aggregators, for videos and podcasts.

MLB.tv will work the same way. It will be accessed via a new pane that can be reached via the small remote. Once a customer's account is synced, any live, out-of-market (as in, not your home team) game across the league can be seen, with the choice of both the home and away team's local broadcast feed. Games up to one week old are available in the archive, and previews appear of each team's scheduled games up to a week in advance.

The picture isn't perfect, but it's quite good, and it's about what you would get if watching the game on a computer. The quality will depend mostly on the type of connection each customer has (either wired or wireless) running from the Roku box to the Web. But MLB and Roku tries to make the experience a bit more consistent by using Swarmcast, an adaptive bit-rate technology that detects the connection speed and adjusts the video quality accordingly, to prevent stuttering or buffering. The eventual goal is to create "an experience that you can't tell the difference from the TV," said Tim Twerdahl, Roku vice president of consumer products.

MLB has led the pack of major sports leagues when it comes to its application of technology. The league's online subscription package currently counts 400,000 subscribers. It also offers a mobile version similar to what's available on Roku now, called At Bat, for the iPhone. But that application costs $9.99 in addition to a subscription package.

But while this is certainly exciting to fans of professional baseball, MLB on Roku doesn't have the broadest appeal. Though baseball has been referred to as "America's pastime," that hasn't been true for a while--and the amount of casual fans who attend games is exponentially higher than devoted followers who pay for MLB.tv Premium. So on its own, the MLB.com streaming isn't likely to add a huge amount of Roku customers.

"It's not going to be an app for everyone," said Ross Rubin, director of industry analysis for The NPD Group. "It may not drive huge new groups of consumers to the platform, but it is significant because it's something different than what we've seen most companies in this category do."

Live content like baseball games is something Roku needed to take on not to get lost in a sea of increasingly Web-connected devices for the living room. Before adding MLB, the main draws of the $99 Roku box were its Netflix and Amazon connectivity. But bigger names like Sony, Microsoft, Samsung, TiVo, and others have been adding TVs, set-top boxes, Blu-ray players, and game consoles that can stream movies and TV shows from Netflix and Amazon, as well as content from social applications Flickr, Facebook, and Twitter.

The downside to those, of course, is they cost much more than $99. But if you already own an Xbox 360 or a TiVo, you're not going to need to buy an extra device like Roku. That's where the MLB deal comes in.

"They've really evolved this device quite nicely from something that was essentially a one-trick pony to a lot more," said Michael Gartenberg, vice president of strategy and analysis at Interpret.

The evolution was enabled by a software development kit created by Roku that it is sharing with partners like MLB and others that allow third parties to create an application that makes their content available on the $99 box. It's been released privately to a few but will have a public debut soon.

There's also a lot more to come, if you ask the Roku guys. "People didn't think live (content) was possible" on their device, Twerdahl said. And now he has his sights set on more live content and other types besides just TV, movies, sports, and podcasts.

"We're trying to diversify," he said. "We still need things like photos and music." Twerdahl said to expect at least eight more content partnerships before the end of the year.

As The Business Insider blog noted recently, it's conceivable that the next partners could be streaming music companies like Pandora and Last.fm (owned by CNET News publisher CBS Interactive); photo-sharing site Flickr; and more Web video providers, like Revision3 or YouTube.

Those are all companies that have done a decent job of distributing themselves on a variety of platforms. And they offer what those in the industry would call "premium" content. But the all-star of video content, the one that every team in the connected device business would love to sign, is still a free agent. Whoever gets Hulu onto its device first will have a huge advantage.

"You look at the number of attempts people have made to try and marry Hulu with the television set, through all sorts of unorthodox methods...what would the demand for Roku be if Hulu partnered with it?" said Gartenberg.

Even if it was a subscription service (Hulu as of now is currently free), that would add a whole new dimension to a device like Roku--where TV content would be on demand on the TV screen, and customers might be able to cut the cord completely on cable or satellite service.

"If you could deliver a PC-quality Hulu experience to a large-screen television set, that's where things get interesting," Gartenberg said. "It's not the number of content partners, but the premium content. Consumers aren't stupid, and aren't interested in mediocre content."