M-Go Grabs Pole Position on Roku Set-Tops for TV and Movies

Digital video service from DreamWorks Animation and Technicolor faces tough battle with iTunes, Amazon

M-Go Grabs Pole Position on Roku

M-Go, the joint venture of DreamWorks Animation and Technicolor, has secured premium placement on Roku’s menu for its movie and TV show rental and electronic sell-through service.

The deal should give the M-Go some needed heft: Roku’s new home page will link directly to M-Go from “TV shows” and “Movies” tabs, rather than M-Go simply being listed in the 1,000-plus channel guide. But the fledgling service still faces a tough battle to carve share from the likes of iTunes and Amazon.

Terms of the deal weren’t disclosed. M-Go has a revenue-sharing agreement with Roku as part of becoming the preferred TV and movie EST provider.

Along with the M-Go deal, Roku is announcing a refresh of its set-top models ahead of the 2013 holiday shopping season. To date, Roku has sold some 5 million boxes; that trails worldwide shipments of Apple TV, which has moved more than 13 million units.

M-Go offers 16,000 titles to rent or buy and expects to have 20,000 by end of the year. The redesigned Roku home screen will include shortcuts linking directly to the M-Go. Movies and shows featured on the service include “Hangover 3,” “The Croods,” “Breaking Bad,” “Modern Family,” “Big Bang Theory,” “Glee” and even new shows like Fox’s comedy “Brooklyn Nine-Nine.”

“We think the Roku relationship will expand our distribution, and increase customer engagement,” M-Go CEO John Batter said.

DWA and Technicolor formed M-Go last summer. The Culver City, Calif.-based company, which has about 150 employees, has been steadily expanding distribution. The service officially launched earlier this year and is available on web browsers, Apple iOS and Android devices, as well as connected TVs and Blu-ray players from Vizio, Samsung and LG.

“We could have launched as another channel” on Roku, Batter said. “But I think for both companies, the driving motivation was to have our engineering teams work together to figure out the deep integration, to get more transaction volume.”

M-Go is still in the process of ramping up as it angles to take on EST heavyweights like Apple’s iTunes and Amazon Video, along with other players including Walmart’s Vudu, Best Buy’s CinemaNow and soon the Target Ticket digital video storefront.

How is M-Go going to gain traction in the crowded EST space? Batter said that unlike Apple, M-Go doesn’t have a “hardware agenda,” and unlike the retailers the venture is exclusively focused on entertainment: “We’re not trying to sell you shoes and toasters,” he said. “So studios are interested because we own our own platform, we run it ourselves, and our agenda is completely aligned with their agenda — which is move more content.”

Currently, M-Go has about 200,000 unique visitors to the service across all devices, Batter said, declining to say how many of those actually made a purchase.

M-Go is preinstalled on Roku’s new boxes, and the updated interface will be rolled out to current-generation Roku devices in October. The M-Go app uses Roku users’ existing account and billing information, so they don’t have to enter separate credit-card info to purchase titles.

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According to Roku, a previous interface refresh for the set-tops in March boosted the average installed channels and searches. Based on that, “we saw a great opportunity to make it even easier and faster for customers to get to their favorite entertainment through integrated movies and TV shows in partnership with M-Go,” said Steve Shannon, Roku’s GM of content and services.

To promote M-Go on Roku, users who activate the service between Oct. 1 and Dec. 31 will receive two free movie rentals.

Investors in Roku, which has raised about $140 million to date, include 21st Century Fox, Fidelity Investments, Hearst Ventures and British Sky Broadcasting.

Roku has three new boxes in its lineup: the Roku LT ($50), with support for up to 720p HD video; the Roku 1 ($60), which provides up to 1080p HD video; and the Roku 2 ($80), which adds a remote with built-in headphone jack for private listening and dual-band wireless, two feature previously available only with the Roku 3.

The top-of-the-line Roku 3 ($100), which debuted this spring, provides all the features of Roku 2 plus Ethernet and USB ports and an enhanced motion-control remote for gaming.

In the U.S., the new Roku boxes may be ordered at Roku.com and are scheduled to be available in retail stores beginning Oct. 1. The devices also will be available in Canada, the U.K. and the Republic of Ireland.