September 16, 2020
As co-creator with Netflix of the subscription streaming video market, Roku has a driver’s seat view of not only the over-the-top video market, but facilitating third-party transactional VOD as well.
Speaking Sept. 15 on the KeyBanc Future of Technology Conference, Roku CFO Steve Louden said the company had a “banner quarter” for the fiscal period ending June 30, with strong SVOD, premium VOD and transactional VOD revenue shares — the latter driven by Universal Pictures Home Entertainment’s Trolls World Tour and Warner Bros. Home Entertainment’s Scoob!.
“That basically was precipitated by the theaters being closed [due to the coronavirus pandemic] and studios coming out with direct-to-consumer offerings,” Louden said. “It kind of woke up an otherwise sleepy TVOD segment.”
Indeed, consumers spent an estimated $2.99 billion on digital transactional entertainment in the first six months of this year, up 25% from the $2.25 billion spent in the first half of 2019, according to DEG: The Digital Entertainment Group. Digital sales of movies, series and other filmed content was up 57% in the second quarter and 33% in the first half, while transactional streaming, in which consumers rent a program for 48 hours, was up 50% in Q2 and 33% in the first six months of the year.
Louden said streaming hours spiked dramatically in the first phases of the lockdown and remain above the pre-pandemic levels.
When asked about the omission of HBO Max and NBCUniversal’s Peacock streaming services on the Roku platform, Louden said it comes down to economics. Roku doesn’t charge end-users to access the platform; yet without it many consumers wouldn’t willingly gravitate toward a particular OTT brand, according to Louden.
Analysts contend non-placement on the Roku platform has hurt Max and Peacock in generating subscribers. Comcast just disclosed that Peacock has generated 15 million subscribers since launching in July.
Disney’s rollout of the Disney+ SVOD platform, which saw the media giant “lean heavily” on Roku during its initial launch, underscores the platform’s importance in the OTT video ecosystem, according to Louden.
“We played a good part in getting them a rapid growth in audience and … when they launched Hamilton, we were the number one platform for viewership,” he said. “I think they’ve leveraged pretty much all our audience development capabilities.”