BSkyB Develops Set-Top Box With Roku for Web TV Service

British Sky Broadcasting Group Plc (BSY), the U.K.’s biggest pay-television provider, is working with Roku Inc. on a set-top box to distribute to subscribers of its new Web-television service, as it responds to increased competition from online rivals.

The hardware will connect TV sets to BSkyB’s Now TV, enabling customers to view movies, live sports and other videos available through the online service, Anthony Wood, chief executive officer for Roku, said in an interview in San Francisco.

BSkyB, which debuted Now TV in July, is responding to increased competition from companies including Netflix Inc. (NFLX), the U.S. streaming service that started offering movies and TV shows in the U.K. in January, and Amazon.com Inc.’s Lovefilm, which expanded its service in the same month. Now TV can be accessed through computers, mobile and other devices and the set-top box giving TV access will be available next year, Wood said.

“The market is still new,” Wood said. “TVs are going to be more like monitors, and then you’ll have a box.”

BSkyB, based in Isleworth, England, and 39 percent owned by Rupert Murdoch’s News Corp. (NWSA), offers the Now TV service for 8.99 pounds ($14.30) a month.

A call to its offices outside of business hours was not immediately returned.

While the Now TV device is being built by Roku, it will not carry the Saratoga, California-based hardware maker’s branding, Wood said. Roku will also add a Now TV application to its own boxes, Wood said.

BSkyB was among the companies that invested $45 million in closely held Roku in July. Roku’s hardware business generated more than $100 million in revenue last year and is “very profitable,” Wood said.

To contact the reporter on this story: Mark Milian in San Francisco at mmilian@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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