By Helen Coster and Munsif Vengattil
(Reuters) – Comcast Corp said on Wednesday it will offer internet customers a free streaming media set top box that works with other services, stepping up competition with Roku Inc in the market for a device that organizes multiple subscriptions.
Roku’s stock tumbled nearly 14% and was on track for its worst one-day loss since March as investors reacted to the increased competition against the Silicon Valley company’s own streaming products. Roku’s stock has surged over 300% in 2019 and recently traded at almost 13 times expected sales, according to Refinitiv data.
Comcast said internet customers who had paid $5 per month for the Xfinity Flex now would get it for free.
“We are having a tough time justifying Roku’s valuation, especially facing such substantial competitors as Amazon, Apple and Google. Now you can add Comcast,” said Loop Capital analyst Alan Gould, who recommends selling shares of Roku.
Comcast’s Xfinity Flex is part of a broader trend to simplify the experience of watching shows on multiple streaming services. The product allows customers to browse and search for programs from the likes of Netflix Inc, Hulu and Amazon.com Inc’s Prime Video, as well as free shows and movies that Comcast will include with the set top box.
Apple Inc, with its Apple TV app, is also trying to be a one-stop shop for buying and watching shows. App users can subscribe to channels like HBO and Showtime (but notably, not Netflix) – and then watch those shows on any device connected to their Apple ID, whether it is an iPhone, iPad or Apple TV box.
(Reporting by Helen Coster in New York and Munsif Vengattil in Bengaluru. Additional reporting by Noel Randewich; Editing by Kenneth Li, Lisa Shumaker and David Gregorio)