Roku, HBO Max Reportedly Near Distribution Deal

With WarnerMedia’s HBO Max SVOD’s app securing placement on Amazon Fire TV, pressure increased on Roku to make a deal — or else risk losing user streaming traffic to a rival app gatekeeper.

Now WarnerMedia and Roku are reportedly ironing the details on an agreement that could go into effect by the end of the year, according to The Desk, which cited sources familiar with the situation.

The Roku platform, which affords users direct access to myriad third-party OTT video apps, combined with Amazon Fire TV, account for 70% of all SVOD consumer traffic, according to ComScore.

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Indeed, of HBO’s 38 million pay-TV subscribers, more than 29 million have free access to Max — yet just nine million have signed up for the platform’s app — a reality AT&T CEO John Stankey attributed in part to hang-ups with Roku and Fire TV.

“We should ask ourselves, is that friction somebody…maybe having market power above and beyond what’s reasonable for innovators?” Stankey told an investor event over the summer.

“We still have work to do to educate and motivate the exclusively linear [HBO] subscriber base [about Max], and we’ll continue to work with our wholesale partners to drive these activation rates,” he added.

The Roku platform (together with Fire TV) had been instrumental to Max precursor HBO Now acquiring eight million subscribers. In exchange for the subscriber growth, WarnerMedia and parent AT&T allowed Amazon and Roku to share in the revenue from each new HBO subscriber derived from the respective platforms.

Roku and Amazon have similar agreements with Disney+ and NBCUniversal’s Peacock streaming services, among others.

For Max, WarnerMedia reportedly wanted new subs to access the platform directly via a standalone app. It also wanted to reduce the revenue share. Both parties have now resolved fiscal differences for the Max SVOD platform, while negotiations continue for the pending ad-supported Max option rolling out in 2021, according to The Desk.

Indeed, Max AVOD would compete with The Roku Channel, an ad-supported streaming platform with 43 million monthly average users through the second quarter. Roku wants third-party AVOD services such as Max to set aside a certain amount of ad time for its own advertising commitments.

 

 

Black Friday: Roku Announces Limited Edition $17 Streaming Player; 99-Cent SVOD Subscriptions

Roku is taking a machete to its streaming media device prices and third-party SVOD fees for Black Friday.

The SVOD co-pioneer Nov. 17 announced that the limited-edition Roku SE streaming player ($17) will be available exclusively at Walmart for Black Friday (Nov. 27) while supplies last. Additionally, Roku is offering extensive discounts on its player lineup with $20 off the Roku Streaming Stick+ ($49.99 MSRP), $30 off the Roku Streambar ($129.99 MSRP) and Roku Ultra ($99.99 MSRP), plus $15 off the Roku Premiere ($39.99 MSRP) at major retailers from Nov. 20 through Nov. 30.

For a limited time, Roku customers can explore promotional offers from more than 30 premium subscription partners on The Roku Channel, including Showtime and Starz, among others. New subscribers can enjoy select premium subscriptions for 99 cents for the first two months. The offers are redeemable through The Roku Channel from Nov. 26 until Nov. 30, 2020. Remaining Black Friday offers will be available to new subscribers for up to 55% off the first three months and redeemable on The Roku Channel from Nov. 26 until Dec. 4, 2020.

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Roku Says Apple’s Airplay 2 Streaming Service Now on Select 4K Devices

In a major development, Roku on Nov. 11 announced that with the release of the new operating system Roku OS 9.4, Apple AirPlay 2 and HomeKit support is now available on select 4K Roku devices.

These include the Roku Ultra, Roku Streambar, Roku Smart Soundbar, Roku Streaming Stick+, and Roku Premiere. Apple AirPlay 2 and HomeKit are expected to roll out to supported 4K Roku TV models with Roku OS 9.4 in the coming days.

AirPlay is a service that Apple devices can use to stream audio and video between electronic devices. It operates similar to connecting to a third-party app except that is located on your network instead of on the Internet.

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With AirPlay 2, Roku users can stream, control and share their content directly from their iPhone, iPad or Mac to their supported Roku device and on the television screen. HomeKit allows users to control their Roku device with their voice using the Home app and Siri on iPhone, iPad, Mac, Apple Watch or HomePod.

“With Roku OS 9.4 now available on streaming players, we are adding all-new ways to navigate and control content-rich experiences on Roku devices … regardless of what other technology products [i.e. Apple] they prefer in their homes,” Ilya Asnis, SVP of Roku OS, said in a statement.

Roku Swings to Q3 Profit as Subs, Streaming Hours Increase

Roku continues to fire on all cylinders despite, and because of, the ongoing pandemic. The Los Gatos, Calif.-based streaming media software manufacturer and ad-supported VOD platform operator Nov. 5 reported third-quarter (ended Sept. 30) revenue of $452 million, up 73% year-over-year from $261.2 million a year ago.

Roku platform revenue increased 78% to $319 million, from $184.3 million. The company posted a profit of $12 million, compared with a $26.5 million loss during the previous-year period.

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The company added 2.9 million incremental active accounts in the quarter to reach 46 million. Streaming hours increased by 200 million hours over last quarter to 14.8 billion. The Roku Channel reached U.S. households with an estimated 54 million people.

“As the ongoing COVID-19 pandemic continued to accelerate the
shift of viewing away from traditional linear and pay TV, we continued to invest in competitive differentiation and execute well against our strategic plan,” founder/CEO Anthony Wood and CFO Steve Louden wrote in the shareholder letter.

Roku Beats $41 Million Patent Infringement Case

A Texas jury Oct. 14 denied a $41 million patent infringement claim against Roku by MV3 Partners LLC that alleged the Los Gatos, Calif.-based manufacturer of streaming media devices and Internet-connected televisions violated its technology patents.

The seven-person jury in the Federal District Court for the Western District of Texas in Waco deliberated five hours before reaching its verdict after the five-day trial. In a statement, Roku said it was pleased with the outcome.

“We are pleased with today’s non-infringement verdict, which vindicates our position that Roku has no liability to MV3 Partners in this case,” Joe Hollinger, VP of litigation and intellectual property at Roku, said in a statement. “We appreciate the efforts of the court and jury during these challenging times.”

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In the complaint, filed last year, MV3 Partners alleged that Roku earns “hundreds of millions of dollars in revenue and profit selling streaming media players and smart TVs nationwide that incorporate MV3’s patented mobile streaming invention,” all without payment to or license from MV3.

The company’s lawyer last year, in a press release, claimed the case would be a watershed moment for the multi-billion dollar streaming content industry, encompassing giants such as Netflix, Disney, Hulu, Amazon and Apple.

Jonathan Waldrop,  the patent litigator working for MV3 Partners, said the case was the beginning of MV3’s campaign to obtain just compensation for the use of its technology by key streaming device manufacturers such as Roku, Microsoft, Samsung and Apple.

It wasn’t immediately clear if MV3 Partners would appeal the decision.

The Roku Channel, Amazon Fire TV Partner, Consolidating Streaming Video Influence

The Roku Channel and Amazon Fire TV have inked a distribution partnership affording the former’s 100,000 ad-supported content titles and 115+ live TV channels onto the Fire TV platform. This includes Fire TV smart TVs, soundbars and streaming devices with Alexa voice commands, according to a blog post.

On the surface, the partnership would seem to make little sense considering the competitive business models. The Roku Channel, which launched in 2017, has about 43 million registered users. Combined with Fire TV’s 40 million active users, the two platforms represent gateways to 70% of the domestic streaming media device market, according to Comscore.

“We’re building on our commitment to make The Roku Channel even more accessible by expanding onto [third-party] streaming devices,” Rob Holmes, VP of programming and engagement at Roku, said of the Fire TV deal in a statement.

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The Roku Channel typically operates revenue-sharing agreements with content holders. The Roku platform, which generated 69% of Roku revenue in the most-recent fiscal period, affords users access to third-party SVOD services such as Netflix and Disney+. Roku is likely splitting ad-revenue with Amazon in order to put The Roku Channel onto Fire TV, according to observers.

At the same time, Fire TV does not allow access to its third-party SVOD services directly via Roku, despite the fact Amazon’s Prime Channels platform (featuring third-party SVOD services) is available on Roku.

This means that Roku users wanting to stream services such as Showtime OTT, Starz, Epix or HBO on their Fire TV, can do so only by subscribing to those services directly through the Roku platform.

It’s a similar situation HBO Max finds itself in. WarnerMedia’s high-profile SVOD platform is not available on Roku or Fire TV. NBCUniversal’s Peacock just inked a deal with Roku, which should significantly enhance its access to OTT video consumers.

“An expanding and increasingly engaged audience makes The Roku Channel a more attractive place for content owners to share their series and films,” wrote Adam Levy with The Motely Fool. “More content makes it more attractive to viewers, creating a virtuous cycle for Roku.”

Roku CMO Matthew Anderson Leaving to Join James Murdoch Venture

Matthew Anderson, chief marketing officer at Roku, is leaving the streaming media device manufacturer to join Lupa Systems, an investment company run by former 21st Century Fox CEO James Murdoch.

Anderson, who disclosed the departure on his LinkedIn page, joins the company in December as a “strategic advisor.”

Anderson has been CMO at Roku since August 2013. Prior to that, he worked as a strategic advisor for 21st Century Fox, working with Murdoch.

“I’ll be joining long-standing colleagues to support inspiring and disruptive companies and deploy Lupa’s playbook,” Anderson said in a statement.

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Anderson was Roku’s first CMO, a stint that included scaling the business “in the face of tech giants,” transforming the company’s business model, launching an IPO on Nasdaq and becoming the No. 1 TV streaming platform in the U.S.

“Roku’s greatest innovations are to come,” Anderson said. “After moving on I will remain its biggest fan.”

Roku: Americans Spend More Time Streaming Video Than Watching Pay-TV

New data from a survey of 2,000 U.S. adults in the COVID-19 era conducted by Roku and The Harris Poll found that 85% of respondents stream video and prefer over-the-top video over pay-television.

Average reported streaming hours increased 19% year over year while average traditional TV viewing hours decreased 13%, according to the survey results.

“These fundamental changes highlight that now is the time for marketers to consider significant realignments of their advertising investments in order to reach consumers this holiday season and beyond,” Matthew Anderson, chief marketing officer at Roku, said in a statement.

Roku is the co-creator of the SVOD market, with Netflix.

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The survey was conducted in part to determine respondents’ attitudes toward gift giving during a pandemic, how they will shop compared to previous holiday seasons, and how their adoption of TV streaming is affecting purchasing decisions.

“How consumers are making their buying decisions and executing actual purchases are undergoing important changes,” Anderson said.

Survey highlights found that Americans are evenly split on their views about the future of the economy, with 70% planning to spend the same or more on gifts this year. Overall, consumers expect to spend a total of $885 dollars on average this year on holiday purchases, up approximately 2.5% from last year’s survey.

Nearly one-third of shoppers (31%) report that they plan to buy more gifts for more people this year because of sheltering in place rules that will bar them from visiting with family and friends.

Nearly one-third (31%) plan to buy a gift to support working from home for either themselves or someone else. Furthermore, as more families spend time at home streaming, many shoppers also report planning to pick up a new television this year with smart TVs topping the gift giving (and getting) list of many shoppers. In fact, 41% of Americans surveyed say they plan to buy a new TV.

With COVID-19 fueling concerns about in-person shopping, consumers now expect to do nearly two-thirds (65%) of their holiday shopping virtually. Streamers are fueling this surge in online shopping: 79% will do most of their holiday shopping online compared to 55% of non-streamers who plan to conduct most of their shopping digitally.

“Despite all of the uncertainty we see in the world today, this report highlights the fact that consumers plan to shop significantly this holiday season,” Anderson said.

The findings provide a clear blueprint for marketers seeking to engage shoppers during what will be a season of TV streaming. Most shoppers are now primary streamers with nearly one in three having already cut the cord according to Roku’s 2020 Cord Cutting survey.

According to the survey results, 2020 truly kicked off the decade of streaming in the U.S., with more than eight in 10 Americans reporting they are streamers. Not surprisingly, 96% of millennials, as well as 72% of Baby Boomers, cited themselves as streamers in this year’s report.

Not only are Americans streaming, they are also consuming a significant amount of advertising-supported streaming content that is reshaping how brands should think about the traditional TV advertising path to purchase.

Roku is a major distributor of ad-supported VOD programming through The Roku Channel.

Indeed, Roku claims 43% of consumers (and 66% of millennials) surveyed reported having seen an ad on a streaming service that caused them to pause the content, go online and shop for the product they encountered.

“We have arrived at a tipping point for the future of TV as we know it where a future involving 50% or fewer households subscribing to traditional pay-TV is now realistic in the short-term,” said Abbey Lunney, director of trends and thought leadership at The Harris Poll. “This shift to streaming, in combination with other consumer insights into the new path to purchase, demonstrate how marketers need to adjust their engagement strategies, not just for the 2020 holiday season, but for the future long term.”

Pluto TV Lands on Roku Platform in Latin America

ViacomCBS’s ad-supported VOD platform Pluto TV has inked a distribution deal with Roku for the streaming video device manufacturer’s platform in Latin America.

The agreement is aimed at expanding access to Pluto TV’s planned 70 channels featuring curated Spanish-language content in 17 Latin American countries. Pluto TV, which ViacomCBS acquired in 2019 for $340 million, has more than 33 million users internationally (including the U.S., Europe and Latin America).

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The deal sees Pluto TV available on The Roku Channel Store in Argentina, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and Peru.

“The arrival of Pluto TV to Roku … will allow our users to have an excellent experience of streaming content on a bigger screen, easily, comfortably and without restrictions,” Marco Nobili, SVP of emerging business and strategy at Pluto TV, said in a statement. “We believe Pluto TV is a great complement to all of our distribution partners who can offer free fan-favorite content to their subscribers and users on the same platform that they consume content.”

Yulia Poltorak, director of international content distribution at Roku, said the deal expands upon The Roku Channel’s ad-supported free content outside the U.S., which includes content from film studios, TV channels and production companies from around the world.

“Now more than ever, our users are asking for [more] free content,” Poltorak said.

NBCUniversal’s Peacock Streaming Service Now Available on Roku

As expected, Peacock and Roku Sept. 21 officially announced that the Peacock streaming video app is now available nationwide on the Roku platform, reaching households with an estimated 100 million people. The agreement followed months of negotiations that saw NBCUniversal’s SVOD service enter the market without distribution on Roku and Amazon Fire TV — both considered must-have distribution channels in the over-the-top video ecosystem.

Comcast chairman/CEO Brian Roberts Sept. 15 disclosed that Peacock, which is available for $4.99 per month with ads and $9.99 without, had attracted 15 million subscribers without Roku distribution since launching nationwide in July.

In addition to a SVOD option offering subscribers access to more than 20,000 hours of on-demand movies and shows, as well as live news and sports programming, Peacock offers a free, ad-supported option featuring more than 13,000 hours of current, classic, and original movies and shows, as well as live and on-demand content across news, sports, reality, late-night, and Spanish-language.

“Roku customers are engaged streamers and we know they’ll love access to a wide range of free and paid content,” Maggie McLean Suniewick, president of business development and partnerships at Peacock, said in a statement.

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“Audience demand for compelling content is fueling a surging shift to streaming for a majority of American households today,” said Tedd Cittadine, VP of content acquisition at Roku. “We’re focused on delivering the kind of high-quality news and entertainment content Roku users want and love … and help NBCUniversal build a bigger fan base.”

In addition to current season programming from NBC and Telemundo, Peacock offers access to live sports like upcoming coverage of the Premier League; hundreds of blockbuster movies like Trolls World Tour, 3:10 to Yuma and Beetlejuice; iconic shows, including comedies “Parks and Recreation,” “Brooklyn Nine-Nine,” “30 Rock,” “Saturday Night Live,” “The King of Queens,” “Everybody Loves Raymond,” “Two and a Half Men,” “Frasier,” “George Lopez” and “Cheers;” dramas “Law & Order: SVU,” “Downton Abbey,” “Yellowstone,” “Friday Night Lights,” “House,” “Battlestar Galactica,” “Psych,” “Parenthood,” “Monk” and “Heroes”; kids programming, including “Curious George,” “Where’s Waldo?” and “Cleopatra in Space”; reality hits, including the “Real Housewives” franchise, “Top Chef” and “Below Deck”; and Peacock Original series, including dramas “Brave New World,” “Noughts + Crosses,” “The Capture” and “Departure”; comedies “Five Bedrooms,” “Intelligence” and “A.P. Bio”;  documentaries, including Black Boys, The Sit-In: Harry Belafonte Hosts the Tonight Show, and A Most Beautiful Thing; and late-night shows, including “Wilmore” with Larry Wilmore and “The Amber Ruffin Show.”

In addition to the Roku platform, Peacock is currently available on Apple devices, including iPhone, iPad, iPod touch, Apple TV 4K and Apple TV HD; Google platforms and devices, including Android TV devices, Chromecast and Chromecast built-in devices; Microsoft’s Xbox One family of devices, including Xbox One S and Xbox One X; and VIZIO SmartCast TVs, Sony PlayStation 4 and PlayStation 4 Pro, and LG Smart TVs. Comcast’s eligible Xfinity X1 and Flex customers, as well as eligible Cox Contour customers, enjoy Peacock Premium as part of their subscription at no additional cost.