RCA Breaks Into Smart TV Category With Roku Streaming Stick TVs; Its Own Platform to Follow

RCA is shipping a fleet of Roku-enabled TVs to BJ’s, Sam’s Club and Walmart, and later this month to Best Buy stores, Pat Deighan, vice president-sales & marketing for ON Corp., the license manufacturer and distributor for the RCA TV brand, told Consumer Electronics Daily Tuesday. The eight models, which come with a Roku Streaming Stick, range from $199 for a 28-inch 720p model to $999 for a 65-inch 1080p, Deighan said.

The Roku Streaming Stick TVs are the first models to roll out as part of RCA’s move into the smart TV category, which Deighan said is a work in progress. RCA retail customers were asking for a smart TV solution, Deighan said, and the Roku Streaming Stick enabled a quick and easy road to market. He cited Roku’s 1,000-plus channels and its “excellent brand recognition and experience” in the marketplace.

That contrasts with ON’s effort to develop a smart TV platform of its own for the RCA brand, a far more “complicated” process that requires extensive development effort to integrate the platform into the TV motherboard, Deighan said. On the content side, individual agreements have to be negotiated with the various providers including HBO GO, Netflix and YouTube. “The beauty of Roku is we can bring all that to market under one platform,” he said. “We tested a lot of different smart TVs next to Roku, and we think the Roku user interface is one of the fastest and quickest to use of any smart TV platform.” RCA is planning to ship three models using the homegrown platform in October, he said.

In response to our question on how the company will position RCA Roku TVs against TVs using the RCA smart TV platform, Deighan said: “We're trying to answer that question ourselves.” The company will “have both, we're introducing both, we may not stick with both long term.” The consumer won’t likely encounter both platforms of RCA smart TVs on the same sales floor, he said. The industry in general is struggling with the question of what a smart TV means to the consumer, he said: “Does it include web browsing or doesn’t it, what do [consumers] really want to use smart TVs for?” Most consumers are using smart TVs for streaming video content currently, he said, but it’s unknown if that will change later. For now, RCA smart TVs won’t include web browsing, he said.

For customers who balk at buying a smart TV when they can buy a less expensive TV and add a Roku media player themselves, RCA is pitching convenience as the reason to buy a Roku-enabled TV. The Roku interface is integrated into the remote control so a second remote isn’t necessary. And a separate Roku box adds another power supply that needs an AC outlet in an area of the home already challenged by the need for unused outlets, Deighan said.

Deighan also cited a trend resulting from a decline in disc player sales. Now that it isn’t necessary to have a disc and a player to get the content they want on demand through streaming, many consumers don’t want to add a box for streaming content if they can get all the functionality integrated into the TV, Deighan said.

That plays into a supplemental strategy for Roku, too, Deighan noted, by bringing Roku a convenience-driven customer it wouldn’t reach otherwise with an add-on player. “That’s why Roku is so interested in partnering with TV manufacturers,” he said. He said Roku has its sights on being more than a platform for content. “They're interested in becoming the OS for televisions,” he said, “and we will work together with Roku."

RCA is still weighing whether to deliver a 4K TV to the U.S. market for the holiday season or wait until next year, Deighan said. “We're still talking about introducing a 55-inch 4K in the fourth quarter,” he said. Several retail customers “are interested” and others are “wait-and-see,” he said. RCA and its retail customers believe 4K will transition “very quickly” once it gains traction, he said. Premiums for 4K panels are “coming down very rapidly,” he said. Most 4K products on the market now are from tier-one brands, which is “the way it should be,” he said. “But we're seeing rapid cost erosion in 4K that’s making us really think about how quickly this might ramp up in 2015.”

RCA has 50-, 55- and 65-inch 4K models that it can introduce in the U.S. in Q4, depending on retailer input, Deighan said. “Whether we do it in fourth quarter, first quarter or second quarter of next year, we're still determining that,” he said. They'll likely have Roku when they do ship, he said.