Roku vs. Chromecast: Who Will Win the Battle of the Streaming Sticks?

Roku has created its answer to Chromsecast. Will its new device be enough to take on the Internet giant?

Mar 8, 2014 at 8:38AM

Before Google (NASDAQ:GOOGL) entered the market with its $35 Chromecast, Roku was the clear choice for a low-priced streaming media box for your television. The stripped-down entry-level Roku 1 at $49 undercut the $99 Apple TV and was clearly cheaper than buying a gaming console strictly for access to streaming content.

Amazon.com lists a number of Blu-ray players that turn your set into a "smart" TV for around $60, but those devices generally offer a limited set of streaming options. Yes, there's also Netflix and Hulu, but they don't match the hundreds of offerings available through Roku or any of its higher-priced competitors.

Chromecast changed that by undercutting Roku's price and delivering a device that was both compact and cool. The Chromecast does exactly what a Roku box does, but it does it plugging directly into an HDMI port and not requiring a surface to sit on. 

Roku clearly noticed that Google has stolen some of its thunder. The company just announced its $50 Streaming Stick -- a device similar in design (though with a more cartoony look) to Chromecast. The new device will be available for purchase in April.

Streaming Stick Hdmi Version

How big is Chromecast?

Google does not release sales figures for Chromecast, but the device was an instant hit when it launched last July. At the time, CNET reported that it sold out on the three official channels Google sold it through: Amazon, Best Buy, and its own Google Play store. Currently Chromecast ranks as the second most popular electronic item sold by Amazon, behind only the Paperwhite model of its Kindle e-reader series.

It's hard to know if Chromecast stole market share from Roku or created a bigger market, but it's logical to assume that it's a little of both.

What is Roku's Streaming Stick and how is it different than Chromecast?

The two devices are remarkably similar with both plugging into any open HDMI port and letting users stream through the device to their screen. The major difference in the stick-like streaming players is that Roku's comes with a physical remote control while Chromecast is controlled strictly through smartphones, tablets, and computers. Roku's device allows users to use phones, tablets, and computers to be used instead of the remote control if they choose.

Roku describes its new device as "a tiny Roku player that gives consumers the easiest way to enjoy the best selection of streaming entertainment on TV." 

Why is Roku charging more than Google? 

It seems foolish for the much-smaller Roku to be charging more than its giant competitor. There is some logic to Roku's higher price, however, as in addition to offering a remote control -- which might appeal to people who actually put their phone down when watching TV -- the company has a much larger pool of available channels.

"Once plugged in, the Roku Streaming Stick lets consumers start streaming from more than 1,200 channels (more than 750 channels in Canada, the U.K., and the Republic of Ireland) of movies, TV episodes, music, news, sports, kids' shows, and free programming – more channels and genres than any other TV streaming device – and all in up to 1080p HD video," the company said in its launch release .

Chromecast has a smaller array of channels, though that number has been growing.

"While the Chromecast has added some crucial apps since its launch (including HBO Go, Hulu Plus, and Pandora), it still can't compare to Roku's sprawling and frequently updated library," CNET said in a review of the new stick.

Does Roku have a chance?

While Roku likely needed an answer to Chromecast, creating a competitor that costs $15 more sounds like an idea straight out of the BlackBerry "how to tank your company" playbook. Roku does offer a lot more channels, but you have to question what percentage of the audience is looking for channels beyond the biggest players. Yes, Roku offers a way to get free anime and obscure professional wrestling (for an added fee), but most users just want access to the most popular streaming services.

Roku's best chance for success may be in keeping its current user base and getting some of them to upgrade to the Stick. The company claims on it blog to have sold just under 8 million Roku players in the United States, as of the end of 2013. That's around 8 million customers who use the Roku interface that may have some brand loyalty. As those customers buy wall-mounted TVs where a stick makes more sense than a set-top box, perhaps they will stay with Roku.

That seems like an odd business strategy and a really poor way to take on a company with the marketing reach of Google. Roku needed to create a product like this, but it should find a way (maybe offer a version without the remote) to be price competitive.

The $2.2 trillion war for your living room

You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.

Daniel Kline has no position in any stocks mentioned. He owns both Chromecast and a Roku player. The Motley Fool recommends Amazon.com, Apple, Google, and Netflix. The Motley Fool owns shares of Amazon.com, Apple, Google, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers