Blog Post

Roku lands in Walmart without Netgear help

Updated. Roku has confirmed that it’s struck a retail partnership to sell its broadband set-top boxes in Walmart (s WMT) stores. But the deal comes without the help of NetgearĀ (s NTGR), whom Roku had partnered with last year to extend its reach into major retail outlets.

Speculation that Roku and Walmart had partnered began as its devices popped up on the Walmart website last week, and the companies have released a press release confirming the deal. Walmart will sell the middle-of-the-road Roku XD player, with the box showing up in stores ahead of Father’s Day. The Roku XD will go on sale for $78, a few bucks less than at most other retail outlets, where it typically sells for $79.99.

Striking a direct relationship with Walmart makes sense, as it will give Roku a huge new retail footprint to reach consumers. That will be necessary as the set-top box maker hopes to expand beyond the early adopter set that has largely made up its customer base. Roku announced late last year that it had sold about a million devices in the first few years of its operations. But it’s looking to aggressively ramp up sales and expects to end 2011 with more than 3 million boxes sold.

At the same time, it throws into question a partnership that Roku announced last year with CE maker Netgear, which had agreed to sell co-branded streaming devices through its retail partners. After striking retail partnerships with Walmart and Best Buy (s BBY), it appears that Roku is focusing less on the Netgear deal and more on direct relationships with big-box retailers.

We’ve reached out to Roku for official comment on what this means for its Netgear relationship and will report back when we have an official statement.

Update: A Roku spokesperson confirms that its partnership with Netgear ended in 2010, and it is now selling products under its own brand directly to retailers.

6 Responses to “Roku lands in Walmart without Netgear help”

  1. TimeKeeper

    It is a bittersweet announcement. Wal-Mart has AMAZING potential to move lots of units. The issue comes with their lack of experise in selling the device, leaving customers to pretty much do their own homework before they come in. Also, like all the other big box stores, their terms are brutal towards the manufacturer. Long payment terms, extra % for marketing, liberal return policies and penalties for returned product.

    I think Roku has a rock solid product but outside this niche group of first adopters, no one knows what a Roku is. It will be a tough sell. Especially with Wal-Mart’s purchase of Vudu.

    This will either be the beginning of the end for Roku or just the end of the beginning. It will be a fun one to watch!

    • Ryan Lawler

      @TimeKeeper – I’m not sure that Walmart’s purchase of Vudu effects this deal in a negative fashion. If anything, the possibility of making the Vudu service available on Roku devices could make Walmart more interested in moving units.

      • TimeKeeper

        @Lawler – My point was that the fine people working in the electronics section don’t really sell as much as work the till. Selling more units is up to Roku more than Wal-Mart. And if they don’t sell, they will be sent back to Roku and that is a punishing blow to the bottom line.

        Selling 1M+ units from their website is nothing short of amazing. Now they have to send thousands of units out of the door (to Wal-mart), without getting paid, and then work like hell to sell them. If they come back, it is a huge hit to the bottom line. If they don’t come back, it’s a huge addition to the bottom line.