I don’t usually post numbers without concrete data to back it up but in this case, I think it’s a safe bet to say that with the number of units Roku sold during the holidays, it now gives them over 1M devices in the market. I know for a fact that in March of 2009, Roku had already sold over 300,000 units. And in the third quarter of last year, the company was quoted in an interview as saying they had sold a “high six figures” worth of units.

I’ve been keeping an eye on Roku’s ranking on Amazon over the past two months which shows just how popular it has been and gives you an indication of just how many they sold during the holidays. For the last 42 days, Roku has been in the top one hundred best selling items in the electronics category, still ranked at number 13 today, even ahead of the 64GB iPod Touch. And in the televisions and video category on Amazon, they are the number two bestselling product.

While the company would not provide me with any data on the number of units sold and only said “we had a great holiday“, I think that would be an understatement. While 1M units is still small when compared to the Xbox 360 or PS3, those are gaming devices targeting a much different audience. Aside from TiVo which has sold more than 1M DVRs, but probably less then 1M Series 3 units, I can’t think of another broadband enabled device in the living room that is as widely adopted as the Roku.

Roku will get some serious competition this year from the Popbox as well as TV and Blu-ray players that continue to add more video platforms and content models to their hardware. But for now, Roku still holds the title belt for the most units sold in the market.

Related:

– Syabas To Challenge Roku With Netflix Enabled, Popbox Streaming Device

– Roku Announces Two New Devices, Hands-On, With Video: More Content Coming

– Review: Hands-On With Amazon On The Roku, Close To 300,000 Units Sold

– Netflix Player By Roku Nearing 100,000 Units Sold: 1% Of Netflix’s Subscribers

A big thanks to Microsoft, Roku, Adobe and the Xbox for giving me some awesome products as free giveaways on my blog last month. The drawings are now closed and I've used a random number generator to pick the winners. Congrats to all the winners below.

The winner will get one Xbox 360 Pro console, a 12-month Xbox LIVE membership, 1600 points and an Xbox 360 Messenger Kit. Winner: Douglas S. from Austin, TX.

One lucky reader of my blog will get a copy of Flash Media Interactive Server 3.5. This is an incredible
giveaway as the software retails for $4,500 from Adobe's website. Winner: Sean D. from New York, NY.

Last month Roku announced the launch of their new Channel Store and in celebration of the launch, I'm giving away one Roku HD-XR unit. Winner: Josh B. from New York, NY.

Thanks to the Silverlight team, I have two copies of Expression Studio 3 to give away. Each of these retails for $599 from Microsoft's website and will go to two different winners. Winners: Lon Van W. from Boise, ID and Logan D. from Seattle, WA.

I’m really surprised that many people in the industry think that yesterday’s announcement by Warner Bros. which limits Netflix’s access to new release DVD and Blu-ray titles after a 28-day window is such a good thing. While the argument is that Netflix now gets access to more digital content, Warner Brothers is not willing to say just how much content Netflix will get or how new any of that content will be. If this deal is so good for everyone involved, why won’t anyone give out specifics? Why won’t they tell us how many new hours worth of digital content this gives Netflix? Why should we believe that the consumer is the one that is really going to benefit from this?

In my mind, all this does is allow Warner Bros. to further control how and when consumers watch content. It removes choice from the market and simply allows the studios to continue to have way too much control over the consumer. I know the argument by some will be that Netflix is betting big on streaming and that this is about the future, but streaming movies are not going to replace DVD or VOD rentals in the next five years. Even Netflix says they expect to still be renting DVDs in 2020. While everyone wants to rally behind the fact this deal pertains to digital content, it makes no real impact on the market other than reducing Netflix’s costs, which is good for the company, but bad for giving consumers more control in the market.

In December, On2 put out more details on their proposed merger with Google in an attempt to get On2 shareholders to be more comfortable with the deal, hoping that they would approve it when it was voted on last month. Since that tactic failed and the company didn't have enough votes to approve the merger, Google has now decided to up their offer for On2 by adding $0.15 per share in cash consideration. Shareholders are now scheduled to vote on this offer on January February 17th.

Since I don't own stock in On2 or Google, or any other company for that matter, and don't have enough of a detailed insight into On2's intellectual property, I can't say what the company is really worth. But the gut feeling I have on this one is that if the deal was going to go through, it would of already. Simply adding $0.15 per share to the deal probably won't convince too many shareholders who voted no in the past to change their mind. Even with the additional fifteen cents, most of the investors shares are probably under water.

In the press release, it says that this, "constitutes Google’s final offer", which is leading some On2 investors to think that a new suitor will now step forth in an effort to buy the company since they know Google won't bid any higher. Why that sounds nice in theory, it really does not make a lot of sense. If another company was interested, they would have come forth already. Microsoft does not need On2, so the idea that Microsoft should buy them just to keep Google from getting them does not make sense either. And when Google made their first offer, didn't they also say back then that it was their "final offer"?

The vast majority of On2's legacy business is based off of a codec. Yes, the company does a lot more than that just produce VP6 and VP8, but trying to grow a business off of a codec is very difficult. A similar analogy would be BitTorrent who for years has tried to create a business simply based on a protocol. How well has that worked out? It's not an easy thing to do. Just ask Move Networks.

Many of the On2 shareholders I hear from often, which is quite a few, all say they are holding out to "get a fair price" which they say can only come from competitive bidding. While I understand the idea, at some point On2 shareholders are going to have to come to the realization that right now, no other company wants to buy On2. That's not to say another company won't want to buy On2 down the road or that other opportunities may come the company's way if the Google deal falls through, but right now there is no other buyer.

By Google adding fifteen cents per share to the deal, it may be just enough to get shareholders who were only a couple of cents from breaking even to now vote yes. It's possible, but I still get the sense that it won't be enough to make the deal happen. We'll find out on the 17th.

Related:

– On2 Gives Update On Google Merger, Don't Think It's Enough To Make It Happen

– On2 Shareholders File Lawsuits Trying To Block Google Acquisition (Vote4On2.com)

– Debunking Some Myths Of The Google/On2 Deal, Questioning VP8's Quality

– Google's Acquisition Of On2 Not A Big Deal, Here's Why

– Why Adobe Should Buy On2 Technologies

This afternoon, Warner Bros. Home Entertainment announced new agreements with Netflix that gives them access to new release DVD and Blu-ray titles after a 28-day window. There has been a lot of talk lately about the potential for these kinds of content deals where the studios force someone like Netflix to wait 28 days to rent physical DVDs, with the upside being that it gives Netlfix access to more digital content faster. What I'd like to know is exactly how much digital content Netflix gets under this new agreement and how quickly Netflix gets access to it. I've asked Warner Bros. for an answer on this and will update the post if they give me one. But until we know that, I think it's pretty hard to say it's a win for Netflix or for consumers. We need to first know the size of the digital library Netflix is getting access to.

While working on a inquiry for WIRED magazine, I was looking through a lot of my data on bandwidth pricing over the past ten years. It's incredible to see just how much the cost of bandwidth has declined and how that rate has accelerated over the past decade. And that rate of decline is just for what content owners were paying and does not even include the rapid pricing decline we've all witnessed with transit costs.

In 1998 the average price paid by content owners to deliver video on the web was around $0.15 per MB delivered. That's per bit delivered, not sustained. Back then, nothing was even quoted in GB or TB of delivery as no one was doing that kind of volume when the average video being streamed was 37Kbps. Fast forward to today where guys like Netflix are encoding their content at a bitrate that is 90x what it was in 1998.

To put the rate of pricing decline in terms everyone can understand, today Netflix pays about five cents to stream a movie over the Internet. If Netflix tried to do this in 1998, at the same quality they are doing it today, it would of cost them $270 per movie. Of course, in 1998 no one was capable of getting a 3Mbps stream, but even if Netflix only encoded their videos for 37Kbps in 1998, it still would have cost them $2.40, $4.80 to stream one movie. (I forgot to double the number for 2 hours) Gives you an idea of just how far video quality, consumption and pricing has come over the past ten years. Yet even with the rapid rate at which pricing has declined, ten years later, companies are still struggling to figure out how to make money from online video.

The drawing is now closed. If you missed the last raffle on my blog for the free Flash Media Interactive Server, you've got a second chance. Thanks to Adobe, I have one more giveaway, this time in the form of a Flash Media Streaming Server, which retails for $995. To enter the drawing, just leave one comment on this post with a valid email address and I'll pick a winner at random on January 25th. A big thanks to Adobe for letting give this away on my blog. Winner: Eliezer Israel.