Roku plans to roll out over the next few weeks at no additional charge software that adds advanced compression technology to the $100 player. The application, which will be sent over the Web as an automatic update, makes it possible to stream HD movies over an average consumer broadband connection, according to Roku.
Netflix, which announced the availability of the player in May, is the first online movie rental service to offer its content through the Roku device. The hardware maker said additional content providers would announce support for the player in the first quarter of next year.
Roku sells the player, which is about the size of paperback book, over the Web. Netflix says it offers 12,000 movies and TV episodes for rent online, including hundreds in HD format.
Netflix isn't alone in trying to lure digital TV owners into using its online service. Rival Blockbuster in November launched its own direct-to-TV player, which was built in partnership with 2Wire.
In launching the players, Blockbuster and Netflix fired shots over Apple's bow for a place in people's living rooms. Apple last year started selling Apple TV, which connects via the Internet to the company's iTunes music and video store. Through the device, people can rent movies and TV shows.
The overall online video market is expected to grow from $1.2 billion this year to $4.5 billion by 2012, according to analyst firm In-Stat. How much of that will be online movie rentals is unclear. The same In-Stat study found that more than half of U.S. consumers still favor purchasing physical disks when they buy movies or TV shows.