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Roku to sell smart TVs in UK as part of Europe expansion

Having conquered the U.S., Roku Inc. is expanding its smart TV licensing program to Europe.

The television software developer will start selling its first smart TVs in the United Kingdom later this fall in partnership with China's Hisense Electric Co. Ltd., CEO Andrew Wood announced at the IFA tech conference in Berlin Sept. 7.

Roku's internet connected televisions come preloaded with its software, allowing customers to download and watch video over the internet.

Services including Netflix have dedicated buttons on Roku's TV remote. Those who have not cut the cord can switch to live TV with an antenna.

Until now, its licensing program offering its software to TV manufacturers has been limited to North America.

Despite regularly releasing upgraded versions of its streaming devices at lower prices with each iteration, Roku's software was in fourth place in the global TV operating system rankings in 2018, with 5.7% of the market. Samsung Electronics was in first place with 21.19%, LG Electronics Inc.'s WebOS in second with 12.6% and Google LLC's Android TV in third with 11.2%, according to Kagan, a research division within S&P Global Market Intelligence.

In search of profit, Roku has cited international growth as a key part of its strategy. It will be looking to capitalize on the U.K.'s growing appetite for streaming and Europe's adoption of smart TVs.

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Nearly half of homes in Britain have signed up to some sort of streaming service, according to media regulator Ofcom. The total number of subscriptions grew from 15.6 million to 19.1 million in 2018. Meanwhile, smart TV sales in Western Europe are outpacing other territories excluding Asia-Pacific, according to Kagan.

Roku already has a taste for the U.K. thanks to its partnership with Comcast Corp. unit Sky Ltd, which tapped Roku to power its streaming service, Now TV, while its media players have been available in the country since 2012. However, Roku is set to face increasing competition in the wake of Amazon.com Inc.'s recent expansion into smart TVs in the U.K.

Roku has been licensing its software to mainly low-cost TV manufacturers since 2014, starting in the U.S. and later expanding to Canada and Mexico in 2015 and 2016 respectively. Over a hundred models of Roku TVs are available in North America from more than 10 brands including U.K. launch partner Hisense.

Ahead of Wood's IFA keynote, Roku gave S&P Global Market Intelligence a rundown of its U.K. plans at a London event. It described the smart TV launch as the "first stage" of its expansion, suggesting it will try to partner with more vendors in addition to Hisense, similar to its numerous team-ups in North America.

Roku predicts that the majority of smart TV manufacturers will ditch their in-house TV software. These platforms, it said, are too costly to build and require constant updates to keep third-party apps running smoothly. Roku has previously indicated that it hopes to fill this void by powering every TV in the world.

According to Roku, the only manufacturer likely to remain committed to its proprietary TV operating system is Samsung, due to its investment in its software.