![]() Roku’s streaming players and sticks are essentially a loss leader, with single-digit margins (the segment had a -0.5% gross margin in fourth-quarter 2019). To a casual observer, Roku is a hardware company. “HBO Max and Peacock are not in that category.” “I can’t sell a TV without Netflix or YouTube,” says an exec at a large television manufacturer that is not affiliated with Roku. What’s favoring Roku (and Amazon) in the protracted battles with WarnerMedia and NBCU is that neither HBO Max nor Peacock is a must-have streaming service today for platform providers, industry insiders say. In addition, movie and TV rentals and purchases on Roku hit an all-time high in the quarter with the release of direct-to-digital feature movies like Warner Bros.’ “Scoob!” and Universal’s “Trolls World Tour.” Roku also stands to get a revenue cut from Disney Plus’ “Mulan” early release on Sept. Wood notes that in the second quarter, premium subscription services on The Roku Channel “achieved significant subscription gains” - he cites ViacomCBS’ Showtime and Lionsgate’s Starz - in part through extended free-trial offers. “As we head into the fourth quarter, when gift-giving happens, it becomes a more material situation for a seller of hardware,” he said in an Aug. WarnerMedia CEO Jason Kilar, though, recently suggested device makers that don’t offer HBO Max will start to feel the pain soon. He also claims the integrated-programming model results in higher content viewing on Roku compared with separate apps, “which benefits us and our content partners economically.”ĪT&T and WarnerMedia execs have lashed out at Amazon over the HBO Max standoff but haven’t directly attacked Roku. “When they streamed ‘Hamilton,’ we were the largest streaming platform of any of the streaming platforms, including phones,” he told analysts on Roku’s second quarter earnings call.Īs for the issue of retaining HBO on The Roku Channel, Wood says the convenience that offers is something consumers really like. Wood points to Disney Plus’ success as a close Roku partner, with the Mouse House streamer roaring to more than 60.5 million paid customers nine months after launch. Fair and reasonable content distribution deals are how we finance the low-cost easy-to-use Roku platform that consumers use to access these services on their TVs.” Regarding HBO Max and Peacock, Wood says, “All of their main competitors are available on the Roku platform. TV advertising spending declined 24%, per Magna estimates. In addition, Roku’s monetized video ad impressions grew about 50% year-over-year in the quarter - whereas total U.S. In the second quarter, Roku usage was up 65% year over year, to 14.6 billion hours of streaming. This year’s COVID stay-at-home orders have only accelerated the migration of consumer viewing from traditional TV to streaming. In 2008, Roku launched its first streaming player, which at the time streamed just Netflix. They look closer to a gatekeeper, like cable TV companies used to be.” ![]() ![]() “What you’re seeing Roku become is more than just an aggregation platform. “We’re in a new world here,” Zgutowicz says. Today, Roku has more than twice the number of Comcast’s residential TV subscribers, which stood at 19.5 million as of the end of June 2020. broadband households, Zgutowicz estimates. ![]() Roku will end 2020 with 52 million user accounts and will have roughly 40% penetration of all U.S. Of Roku’s 43 million total active accounts at the end of the second quarter of 2020, about 95% are in the United States. In the U.S., it has the broadest reach of any over-the-top platform, says Wall Street analyst Mark Zgutowicz of Rosenblatt Securities. Roku openly publishes its standard distribution agreement for content suppliers, Wood says, and those conditions “haven’t changed over the years.”Īfter more than a decade selling cheap streaming devices, Roku has built a prodigious customer base far bigger than that of any pay-TV provider. The soft-spoken exec, an engineer by background, is matter-of-fact in discussing the disputes with HBO Max and Peacock. “Our platform is open to these services on very reasonable terms,” says Roku founder and CEO Anthony Wood - an unlikely flag-waving OTT revolutionary who’s shaking up the TV biz. ![]()
0 Comments
Leave a Reply. |