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Roku CEO explains why Apple is breaking with tradition and putting its streaming services outside its famous walled garden

Key Points
  • Apple announced its new TV streaming service at a media event Monday, saying it will distribute the app on a variety of existing streaming platforms, including Roku.
  • Apple's decision to distribute its new streaming TV service through third parties is an unusual choice for a company famous for its isolationist policies.
  • Roku CEO Anthony Wood said in an interview on CNBC that it's necessary to be on the leading streaming platforms to launch the type of service Apple is announcing.
Anthony Wood
David Orrell | CNBC

Apple's decision to distribute its new streaming TV service through third parties is an unusual choice for a company famous for its isolationist policies. But the choice indicates that Apple sees value in breaking down its walls to reach cord cutters who have already flocked to other platforms, Roku CEO Anthony Wood said in an interview on CNBC Tuesday.

"Obviously, they're counting on jump-starting [the streaming service] with all of their iPhone and iPad and Mac customers," Wood said on CNBC's Squawk Alley. "But actually, smart TVs are the way that most streaming services, long-form streaming services are viewed by customers. That's where they spend most of their hours. And so for any kind of service like that to be successful you want to be on the leading streaming TV platforms."

Roku held 37 percent of the market share of streaming media players as of early 2018, a Parks Associates report found, while Apple TV held 15 percent of the market share. Roku maintains dominance through a variety of devices that let customers access streamed content, including smart TVs and players that can connect standard TVs to streaming.

Apple's relatively small share of the streaming media player market may have encouraged the company to branch out of its walled garden, Wood's analysis suggests. At its media event Monday, Apple said the Apple TV Channel will be available on Apple devices as well as third-party devices including Roku, Amazon Fire TV boxes, Vizio, Sony, LG and Samsung smart TVs. Apple TV+ will include original content from Apple and be available through the Apple TV Channel.

Apple offered sparse details about its new streaming service, which will include Apple TV Channels, which lets you sign up for third-party services, and Apple TV+. The company did not say how much it will cost to sign up for a la carte channels like HBO and Showtime through its service.

Roku's stock rose Monday on the news that Apple would distribute its streaming channel on its players. But the stock fell Tuesday after some analysts speculated that the short-term benefits of Roku's inclusion could be to its detriment in the long-run.

Wood would not say which companies he thinks will dominate in streamed content, but said the plethora of options is introducing "the golden age of TV."

"It just makes TV great and I think it will just accelerate the switch to streaming," Wood said.

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Watch: Apple unveils new Apple TV+ streaming service

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Apple unveils new Apple TV+ streaming service