August 12, 2019
Lost in Roku’s recent impressive financial results was disclosure that the streaming media device manufacturer and operating software platform is working with Walmart to roll out branded hardware.
“We recently agreed with Walmart to offer several new Roku devices, including audio [speaker] products to their customers under their Onn brand,” CEO Andy Wood and CFO Steve Louden wrote in the shareholder letter. “This is in addition to Roku TVs and Roku players already sold through Walmart.”
Roku manufactures OEM streaming hardware and sticks for Comcast/Sky-owned Now TV, among other European customers. The OS platform will be at the heart of NBC Universal’s pending streaming service.
Roku also remains one of the largest smart TV brands due to its embedded OS platform in myriad third-party TVs, including Philips, RCA, JVC, Hitachi, Sharp, TCL and other Chinese-made units — many sold in Walmart.
The Roku platform revenue continues to drive the company’s growth at the expense of loss-leading hardware sales.
Platform (ad-supported) revenue in the second quarter (ended June 30) skyrocketed 89% to $167.7 million, while streaming device (hardware) revenue increased 24% to $82.4 million from $66.5 million last year.
Indeed, The Roku Channel has become one of the largest AVOD platforms delivering free, largely third-party catalog content.
With Walmart reportedly killing efforts to produce original content and a branded streaming video service around Vudu, partnering with Roku could help the world’s largest brick-and-mortar retailer remain relevant in the digital age.
It could also help Roku grow its 30 million active monthly accounts.