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Summary:

Roku removed about two dozen channels from its channel store this week to give Dish exclusivity for foreign-language content on its platform. The move led to a backlash from developers and could foreshadow the future of online TV. But Roku insists that customers will benefit.

dishworld

Bollywood movies, Lebanese news, German cooking shows: Roku’s media streamer has become a go-to device for small online video services that target expats from all over the world. The first live-TV feeds on Roku were foreign-broadcast transmissions, and numerous companies have used Roku exclusively to reach expat audiences within the U.S. But for many developers, all of this came to a halt this week when Roku removed 25 channels with foreign-language content, effectively shutting down the entire international section of its channel store.

Dish began distributing foreign-language content on Roku in May, and it wants to be the only one to do so.

The reason for this move? Roku struck a distribution agreement with Dish Network in May, which makes the satellite provider’s DishWorld service the exclusive distributor for foreign programming on the platform. Customers can use DishWorld to subscribe to packages of content from countries like India and Brazil, with streams delivered directly to their Roku boxes — no satellite subscription required.

Roku contacted developers affected by this about a month ago and told them the only way to remain on the service would be to strike a licensing agreement with Dish, which would put the TV provider in charge of distribution and billing of their content. Otherwise, they would have 90 days to transition their customers off the platform but wouldn’t be allowed to add any new customers during that time. A few edge cases, including companies that distribute only small amounts of foreign content, may be able to stay on Roku, but they will need Dish’s approval first. And some will be able to maintain their foreign-language content outside the U.S. and Canada.

A Roku spokesperson sent us the following comment via email:

“As DISH is the leader in international programming, by partnering with them we can leverage their expertise to grow our international and foreign language content under their expertise. For customers, this strategy allows us to maintain the best selection and highest quality of international and foreign language content.”

Limited choices, limited options

Mango Mobile TV has been distributing Indian movies and TV shows on Roku. The company is now looking to accelerate its smart-TV app development.

Predictably, the developers affected by the move don’t share that point of view. Some of them voiced their frustration in Roku’s developer forums.

I have talked with a few developers since Dave Zatz first reported about Roku’s move and also heard various complaints. Krishna Jonnakadla, the VP of marketing for Mango Mobile TV, told me his company is “deeply disappointed” by Roku’s move.

He went on to say,

“Instead of encouraging more people and content to get on to the platform, Roku has taken just the opposite decision. We believe customers are going to face limited choices and limited options. Customers may in fact see an increase in pricing due to the fact that Dish might have to tag on their margins to the aggregated content they will be bringing on to the platform. We don’t believe this will be a good move for Roku or their current customers.”

Mango Mobile TV has been distributing Indian movies and TV content on Roku, and Jonnakadla told me the company is now accelerating its development of apps for Samsung’s connected TVs and other smart-TV platforms in light of Roku’s decision. He also said his company tried to reach out to Dish several times about its presence on Roku but has never gotten any response. I have heard similar complaints from another developer, who described the situation as a “checkmate.”

The future of Roku: looking like a cable box?

There’s some irony in all of this: When Dish brought its DishWorld service to Roku, it seemed like the first step toward a virtual cable operator — a company that offers customers pay-TV bundles transmitted over the Internet without any physical infrastructure in place. There has been lots of talk within the industry about the possibility of such virtual TV offerings, with many hoping this would lead to cheaper and more flexible bundles and eventually more competition.

However, if TV providers are turning to the Internet to distribute their fare, they could also make online video look much more like traditional TV. Devices like Roku could end up looking much more like a traditional cable box — exclusive distribution agreements included.

  1. Caveat fidelis all over again. No one but the screwed developers so much as sneezed when twitter began its assault on its developers. Not a single tech luminary so much as questioned the ethics or consequences.

    So why shouldn’t these bums follow?
    Someday, one of these “companies” is going to cross someone with enough juice to push back in a meaningful and lasting way. Someday. Until then… caveat fidelis.

    @DanFarfan

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  2. First and fore most important thing is that most of the international streaming channels do not have license to stream in the US.

    This is not the first time. ROKU blocked YouTube from the beginning.

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    1. Over the top channels do not require a US broadcast license since Internet is not a regulated environment. Apparently, roku is proving it otherwise.

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  3. This is terrible news. I own a Roku and have previously been a subscriber of Dish’s foreign satellite programming. I was looking forward to the possibility of subscribing to foreign channels again without the hassle and cost of extra dish installations, but I did not expect that they would just squash the up and coming competition like this. I will probably end up avoiding this offering so I don’t support this behavior. Roku also better watch themselves. Once the Vizio Co-Star running Google TV comes out at $99 (any time now?), they will have some stiff competition from a player that prides itself in keeping its environment open and its playing field level.

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    1. I agree 100%. I was hoping for an escape from the tyranny of Dish net and never been happier watching Indian channels on Roku. It is depressing to know that we are getting back to the monopolistic days with such exclusive arrangements. Cable TV all over again.
      I guess I will get rid of Roku and look forward to Samsung TV or Google TV.

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  4. This is terrible news mostly for thousands of ethnic subscribers using roku. Dis is forcing them to Subscribe to dish who has fewer channels with less content and more expensive. People will just switch to boxee, android boxes, Samsung smart tv etc. roku just dug itself a grave. By the way, with boxee you can watch all over the air channels for free.

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  5. I was a big fan and an early adopter of Roku. This move by Roku is deeply disappointing . I rely on these apps to view international channels and are either too costly or unavailable on Dish. May be time to make a switch.

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  6. Two words- Proxy Server. Well, I guess it’s time for me to acquire a Mac Mini and subscribe to a proxy service so that I can watch iPlayer for BBC content and Pluzz for French programming. With this announcement the Roku has now become a useless platform. Oh well….

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  7. YesterdayIsTomorrow Monday, July 30, 2012

    “a player that prides itself in keeping its environment open and its playing field level.”

    This is the opposite of Google, these days.

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  8. I have bought Roku mainly for the purpose of watching international channels at affordable rates. I am disappointed by this kind of decision by roku.

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  9. We have gifted 500 roku 2xs devices for our company employees who are at onsite projects in USA and Canada, now most of them are complaining about dish exclusive agreement with ROKU which is badly hurting the reputation of the open platform roku market, roku shouldn’t have done this agreement with dishworld. This is against fair competition ethics in open platform market.

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  10. disappointed roku user Friday, August 17, 2012

    i have purchased roku just for watching indian channels. now i wont be able to do that. I am ready to sell my Roku 2 XS.

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