Roku's Survival Will Take More Than Beating Apple TV

Heavy users of streaming video love Roku, which makes puck-size boxes used to view Internet-streamed video on television sets. Since it began piping Netflix from broadband connections into viewers’ living rooms in 2008, Roku has become the favorite device among 37 percent of U.S. households with streaming players, compared with 24 percent for Apple TV, according to researcher Park Associates. On Sept. 25, Roku released new versions of its devices, making minor improvements to its cheaper models and adding content from M-Go, a video rental and purchase service owned by MediaNaviCo.

With hundreds of channel-like apps, the company already has much more content than Apple TV, although the absence of iTunes and YouTube are big gaps. Despite its early-mover advantage and coterie of hard-core users, Roku is struggling to expand beyond its niche and has been forced to find other sources of revenue besides hardware sales.