Roku Channel Bows in the United Kingdom

Roku late April 6 announced the arrival of its ad-supported free The Roku Channel in the United Kingdom featuring more than 10,000 movies, TV episodes and documentaries. There are no subscriptions, fees or logins required to access The Roku Channel.

The AVOD platform is available to consumers with a Roku streaming player, Roku TV, Now TV device (manufactured by Roku) or Sky Q box.

The channel features a selection of popular global and British TV series, including titles such as “Homes Under the Hammer,” “The Commander,” “Ultimate Force,” “Fifth Gear,” “Skins” and “Britain’s Best Bakery,” alongside Hollywood movies such as Get Carter, The Wicker Man and Les Miserables.

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“With The Roku Channel we are making it easy for consumers to find great free entertainment,” Rob Holmes, VP of programming, said in a statement. “Ad-supported viewing is one of the fastest growing categories on our platform and we are excited to meet the consumer demand for free TV.”

The channel includes personalized recommendations and search capabilities on Roku and Now TV devices. Users will also find a special “kids & family” section, easy for children and parents to find age-appropriate content. There is also a character row, helping parents and kids find shows. Titles include “Bob the Builder,” “Teletubbies,” “Oddbods,” “Bernard,” “Ryan’s World Specials,” “Fireman Sam” and “Baby Einstein Classics.”

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The Roku Channel helps existing publishers on the Roku platform as well as new publishers to drive additional viewership of their content. The Roku Channel in the U.K. features more than 40 content partners, including All3Media International, EndemolShine Group, FilmRise, and DRG, plus Hollywood studios Lionsgate U.K. and Sony Pictures Television, among others.

Roku: Idle TV Sports Viewers Streaming More Movies, TV Shows

With professional (or any) sports on television an early victim of the coronavirus pandemic, new data from Roku suggests linear TV viewers suddenly denied access to sports of any kind have embraced streaming TV shows and movies more aggressively than other Roku subscribers.

March 2020 Week 1 vs. March 2020 Week 3

NBA and NHL linear TV viewers increased their non-sports streaming on Roku among the following genres, respectively:
News: 92.15%, 119.83%
Film & TV: 74.92%, 67.56%
Lifestyle: 66.74%, 51.92%
Live TV: 52.88%, 60.12%
Music: 42.99%, 63.53%
Reality: 41.11%, 30.29%
Kids: 33.48%, 31.29%
International: 23.42%, 34.25%
Comedy: 15.04%, 19.66%
Sports: -49.99%, -71.42%

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“Roku users who watched the NHL or NBA on linear TV in February increased streaming hours on the Roku platform faster than the average Roku user,” Dan Robbins VP, ad marketing & partner solutions, wrote in an April 2 blog.

Robbins said that while overall linear TV usage among sports viewers is flat, they are watching more film, lifestyle, music and news on the Roku platform.

Roku had more than 30 million active accounts in the most-recent fiscal period. It added 1.4 million net accounts in the quarter. Viewers streamed 500 million more hours in Q2 than in the previous-year period, or 9.4 billion hours total.

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Robbins said Roku users who watched the 2019 NCAA Men’s College Basketball Tournament (“March Madness”) on linear TV also streamed more video this March.

“Over the last three weeks, these fans shifted their prime time viewing to entertainment channels in the film & TV genre,” he wrote.

Roku Offering Free Premium Video Access

Add Roku to the expanding list of media companies giving away access to content to consumers increasingly being asked to stay home by local government due to the spread of the coronavirus.

Many streamers are turning to live news and local news, kids and family entertainment, at home fitness, educational and faith-based channels. In the coming weeks, Roku said its streaming media devices would highlight free content on The Roku Channel, via email newsletters and social media through a “Home Together” campaign.

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The co-creator (with Netflix) of the SVOD market says it has deals with more than 20 premium partners offering 30 days of free viewing through extended trials within The Roku Channel, including Showtime, Epix, FitFusion and Smithsonian.

Additionally, many other partners across the Roku platform are unlocking their channels or providing extended free trials to make entertainment even more accessible at this time.

To access 30-day free viewing (visit the Home Together — Special Offers row in The Roku Channel on a Roku device or on the web to redeem extended free trials.

“We hope ‘Home Together’ makes things a little bit easier for you. Take care and stay safe,” Roku said in a statement.

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Participating content providers include: Noggin (60-day trial available starting 4/1/20), Lifetime Movie Club, History Vault, Hallmark, A&E Crime Central, AcornTV, The Great Courses, UMC, UP Faith & Family, FitFusion, GaiamTV, Screambox, Hopster, Shout! Factory TV, Baeble Music, MHz Choice, ZooMoo, Grokker, Hi-Yah!, Fandor and BFI.

CBS All-Access is offering an 30-day extended free trial, Fox Now has unlocked all past seasons of “The Masked Singer,” Fox News is unlocking its live feed for all Roku subs; WWE Network has unlocked a large portion of its on-demand library, including recent episodes of “Monday Night Raw,” “Friday Night Smackdown,” and more.

NBA League Pass is free through April 22; simply create an account on the Roku device to gain access to catalog fare (no games being played currently).

Similar to other digital platforms, Roku is offering access to 15 early-release movies.

Kids & Family on The Roku Channel features free options such as “Ryan’s World,” “Sesame Street,” “LeapFrog” and much more.

PBS Kids (free) includes “Curious George,” “Daniel Tiger’s Neighborhood,” and “Arthur”; (free) — Everything from nursery rhymes to shows for kids up to 10 years old, including Thomas & Friends, Pokémon, My Little Pony, Barbie and more.

GoNoodle (free) — Make screen time active by keeping kids moving with yoga, mindfulness activities, and dance videos to favorites like “Baby Shark” and more.

The Roku Channel offers hundreds of free movies, TV shows, documentaries, live news and much more. It features a “Home Together” row, with free entertainment curated into categories like Essential Movies & TV, Kids Family & Fun, Couch Concerts, Comfort TV, and more.

Also offered is a Featured Free option on the Roku home screen and viewers can do a voice search for “free movies” or “free TV shows.”

Roku, AMC Theatres, Discovery Tap Credit Lines — For Different Reasons

Movie exhibitors, media companies and some home entertainment tech brands are tapping into lines of credit as the drastic change in business due to coronavirus upend traditional revenue patterns and operations.

Discovery, parent to myriad entertainment brands including HGTV, Food Network and Eurosport, said it borrowed $500 million to help it get through the unprecedented fiscal uncertainties, according to a regulatory filing.

“On March 12, the company drew down $500 million under the credit facility to increase its cash position and maximize flexibility in light of the current uncertainty surrounding the impact of COVID-19,” read the SEC filing. “The company has upcoming corporate debt maturities in June of $600 million and in June 2021 of $640 million.”

Disney March 20 disclosed it was selling $6 billion in bond debt to hold it over during the crisis. “We have closed our theme parks; suspended our cruises and theatrical shows; delayed theatrical distribution of films both domestically and internationally; and experienced supply chain disruption and ad sales impacts,” the company reported in a filing.

AMC Theatres, the world’s largest movie exhibitor, March 20 increased its borrowings under its “revolving credit facilities” as a precautionary measure in order to increase its available cash and preserve financial flexibility during the ongoing global shutdown resulting from the COVID-19 outbreak.

As of March 24, the exhibitor had borrowed $215 million under the credit facility and £89.2 million under the Odeon Credit Facility in the United Kingdom, which constitutes all AMC’s remaining available amounts of available credit.

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Wall Street’s MKM Partners has estimated AMC Theatres has a four-month window to survive in a zero-revenue environment when factoring in its lines of credit.

With word the U.S. Senate would vote March 26 for the third time on a $2 billion stimulus bill, AMC Entertainment shares ended March 25 up about 13%.

Meanwhile, Roku, which co-created the streaming video market with Netflix, borrowed $69.6 million from its credit facility, according to a March 24 regualtory filing.

The Los Gatos, Calif.-based company did not disclose what it intended to do with the funds, but media reports suggest the company is ramping up CE production to meet the demands of quarantined consumers.

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Amazon reportedly has shortages of select Roku and Amazon Fire TV streaming devices. The e-commerce behemoth reports the $39 Roku Premiere streaming player will be in stock April 1, and the $24 Roku Express device would be in stock March 29. Amazon’s standard $23 Fire TV stick is slated to be in stock April 5.

Roku is likely seeing strong active user and streaming activity growth as the pandemic runs it course. The company’s shares finished the day up 8% and gaining 16.1% March 24 following a positive note from Needham analyst Laura Martin.

At the same time, the Roku continues to struggle making a profit. While it is well-positioned to benefit from the rise of streaming services and cord cutting globally, Roku’s path to profitability is unclear, as Roku continues to expand its workforce to support its next leg of growth, according to Wedbush Securities media analyst Michael Pachter.

“Achieving profitability in Roku’s international markets will take time,” Pachter wrote in a March 25 note. “The recent share price decline reined in Roku’s usually lofty valuation, so we are taking this time to lower our price target. As shares are trading within 10% of our price target, we reiterate our ‘neutral’ rating.”

Report: U.S. Dominates Global SVOD Revenue

While SVOD services around the world continue to add subscribers, revenue continues to be largely driven by the United States — birthplace of the distribution channel created in 2007 by Netflix and Roku.

According to new data from Strategy Analytics, consumer spending in 2019 on SVOD services globally was $53.34 billion, with the U.S. generating 43% ($22.93 billion) of the revenue, followed by China (17%, $9 billion), Germany and the United Kingdom at 4% each ($2.13 billion). Overall, the top 10 countries represented 81% of consumer spending on SVOD services.

The report suggests that by 2025, SVOD consumer spend worldwide will grow to $102.86 billion, with the U.S. accounting for 44%, followed by China (15%), and Germany (5%).

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Strategy Analytics suggest reasons for U.S. domination in SVOD revolve the fact that U.S. TV households are more likely to subscribe to SVOD than those in other countries. In 2019, 74% of domestic TV households subscribed to one or more SVOD service. In comparison, the global average was 32%.

On average, U.S. SVOD households are more likely to subscriber to multiple services than their counterparts in other regions. On average, domestic households subscribed to 2.45 SVOD services in 2019, by 2025 this will grow to 3.21. In comparison, SVOD households globally subscribed to 1.54 SVOD services in 2019, by 2025 this will grow to 1.82.

“Whether it is pay-TV, video rental and sell-thru, or subscription VOD, U.S. consumers have historically shown a willingness to spend on these products and services at a far greater rate than those in the vast majority of other countries,” Michael Goodman, director, TV & media strategies, said in a statement.

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Goodman said local and regional SVOD services globally must be “realistic” about potential of SVOD revenue and not base their business models on U.S. levels of demand.

Indeed, SVOD services tend to be more expensive in the U.S. than in other countries, according to the report. Globally, the average spend per SVOD service in 2019 was $6.24, in the U.S. the average was 63% higher at $10.22 per SVOD service. Given that each SVOD household in the U.S. subscribes to multiple services, they spent an average of $22.52 per month compared to $9.26 globally.


COVID-19: A Boon to Home Entertainment?

The sudden spread of the Coronavirus disease (COVID-2019), an incurable infectious disease that has killed more than 2,200 people, into Italy, Iran, Austria, Spain, Croatia and South Korea, has sent global markets on a downward spin.

The Dow Feb. 25 reported its worst two-day slide in history in part on the impact of the disease as the Centers for Disease Control and Prevention in Atlanta issued a report saying it was “inevitable” the disease would infiltrate the United States.

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The news had one Wall Street analyst proclaim a potential upside for Roku, which pioneered the subscription streaming media market with Netflix, and now controls the streaming device market as well.

Needham & Co. analyst Laura Martin, in a note, believes Roku could be a stock that benefits should COVID-19 expand into the United States.

Specifically, Martin contends that should the virus spread domestically, consumers would more likely opt to stay home to be entertained rather than going out to the movies, concerts and other public live-event venues.

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In other words, consumers would increasingly opt for home entertainment choices such as subscription VOD, ad-supported VOD, DVD/Blu-ray Disc rentals and/or purchases.

Indeed, Redbox affords users the ability to rent discs online for quick pick-up at the nearest kiosk. The vendor also enables consumers to rent/buy digital titles online.

Walmart-owned and Amazon Instant Movies do the same, while Movies Anywhere platform directs consumers interested in purchasing or renting titles from one of eight digital partners, including Vudu and Amazon.

Movies Anywhere is available free on Roku players and Roku branded televisions, with the digital hub eliminating the need to surf Roku channels and Apple products looking for new-release movies.

Roku-enabled streaming devices top the market, including Apple TV, Google Chromecast and Amazon Fire TV, with 25% of all connected televisions sold in the U.S. being a branded Roku TV.

“That would boost hours viewed and available ad units above projections,” Martin wrote, promoting investment in Roku as a defensive strategy. She lists Roku with a “Buy” rating and a $200-per-share price target, which is 71% above what the stock closed at on Feb. 25 — and up 3% from the previous day.

Cinedigm App Development Platform Now Linked to Roku

Cinedigm Feb. 24 announced an expanded third-party app development support for the Roku platform via its “Matchpoint Blueprint” software. The cross-platform framework enables content owners to launch feature-rich OTT video streaming apps for The Roku Channel, Roku TVs and other Smart TVs.

Cinedigm claims its app platform enables developers — in weeks, not months — fully integrated billing, configurable content menus, custom watch lists, in-app notifications and alerts, machine learning-based recommendations, single sign-on (SSO), DRM, ad support, and advanced analytics reporting, among other features.

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In addition to the Roku devices, “Matchpoint Blueprint” is compatible on iOS and Android devices — allowing developers to stream content directly from their phones using the platform’s Chromecast capabilities.

“Roku users have responded warmly to our eclectic content in the past, and we are excited to provide them with another intuitive premium offering that will help them create high-quality apps of their own,” Tony Huidor, GM, digital networks with Cinedigm, said in a statement.

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GM Aspiring creators and seasoned professionals alike will benefit tremendously from all that the user-friendly Blueprint Plus app offers — making what was once a long, expensive, and often arduous process significantly easier and more cost-effective, and allowing them to bring their unique visions fully to life as they get their creations out and to consumers in far less time than on similar template apps.”


Roku CEO Takes Credit for Disney Reaching 26.5 Million Streaming Subs

Disney said it generated 10 million Disney+ subscribers in the first 24 hours of launching — largely through its app. How it reached 26.5 million subs just six weeks later, well, Roku would like to take some credit for that milestone.

Speaking on a Feb. 13 earnings call, Roku founder/CEO Anthony Wood told analysts that with the company’s signature streaming media device ranked No. 1 (by Parks Associates) in the domestic market, having access to the Disney+ app on its platform help jump start subscriptions.

“One of the things Disney did, is they really lean into the tools that we have available on our platform,” Wood said. “And when companies do that, I mean, we’ve built a lot of great ways to sign up subscribers. So, I think we were an important part of them reaching that milestone.”

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Wood, who contends half of all domestic pay-TV subs will cut the cord by 2024, doesn’t see linear TV distributors such as Comcast entering the over-the-top video market as a threat.

“We have the Xfinity app on Roku,” he said. “And I have it on my Roku, and that’s what I use to watch TV sometimes. [But] we just don’t see competing with traditional cable distributors, it’s a big part of our [OTT] competitive dynamic.”

Wood said the pending rollout of the Peacock streaming service by NBC Universal would likely give Roku an additional third-party app to market — although no official agreement has been reached.

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Roku monetizes its platform on a revenue-sharing basis for third-party SVOD services and splits ad-revenue for AVOD platforms. The company said it made $23.14 per user in 2019 — up $5.19 per user in 2018.

“We’re an essential partner for any streaming services trying to build a national audience in United States,” he said. “So, I think it would be natural to assume that there will be some sort of [Peacock] deal down the road.”


The Roku Channel Topped 56 Million Viewers in 2019

It was a banner fiscal 2019 for Roku, co-creator (with Netflix) of the subscription streaming video market. The company continues to make strides in ad-supported VOD through The Roku Channel, which ended 2019 with more than 56 million active viewers.

In the Feb. 13 shareholder letter, founder/CEO Anthony Wood and CFO Steve Louden attributed the viewer growth to expansion of the “quality and scope” of the ad-supported content, launching new subscription channels and increased investment in product and capabilities.

“We have added more than 40 premium subscription channels, launched the ‘kids & family experience,’ and now offer more than 55 live linear channels,” Wood and Louden wrote. “We also continued to expand access to studio and network movie and TV content.”

For the full fiscal year (ended Dec. 31, 2019), Roku exceeded $1.1 billion in revenue and reinforced its position as America’s No. 1 TV streaming platform by hours streamed. The company added a record 4.6 million incremental active accounts in Q4 and ended 2019 with 36.9 million active accounts. Thanks in part to strong holiday sales (and average discount pricing of 10%), player units were up 33% year-over-year.

Platform revenue increased 78% to $740.8 million. Roku added 9.8 million incremental active accounts in 2019 to reach 36.9 million at year-end. Streaming hours increased by 16.3 billion hours to a record 40.3 billion. Average revenue per user (ARPU) increased $5.19 to $23.14 (trailing 12-month basis).

Roku monetized video ad impressions more than doubled again in 2019, and nearly one in three smart TVs sold in the U.S. were Roku TVs.

“In the midst of this ongoing shift in the industry, we continue to execute well against our strategic plans by launching innovative products, being a neutral partner at the center of the streaming ecosystem, building capabilities to aggregate content and engage viewers, and further strengthening our unique advertising platform which offers superior capabilities for brands,” Wood and Louden wrote.

The executives said user engagement with the Roku platform grew as users streamed 11.7 billion hours in the quarter, an increase of 60% year-over-year. This contributed to a record 40.3 billion streaming hours during 2019, a 68% year-over-year increase.

The year-over-year growth rate in streaming hours moderated somewhat in Q4 2019 versus Q4 2018 due in part to the timing of Black Friday falling a week later in 2019 and the partial rollout of the “Are you still watching” feature, which prompts users to confirm they are watching after a period of inactivity.

Finally, platform monetization continued to increase with ARPU up to $23.14 (on a trailing twelve months basis), up 29% year-over-year, as we continued to grow video advertising impressions across the platform, including on The Roku Channel. For Q4 and full year 2019, Roku monetized video advertising impressions more than doubled year-over-year.

Regardless, with growth come additional costs. Roku generated a $17.4 million loss in Q4, compared to net income of $5.5 million during the previous-year period. The loss it expected to increase to $55 million to $60 million in the current fiscal period (ending March 31).


Roku, Fox in Carriage Dispute Entering Super Bowl Weekend

In a first, Roku has notified its 32.3 million platform users that it might pull the Fox Channel app ahead of the Super Bowl on Feb. 2, which will be broadcast on Fox.

“Roku’s distribution agreement with Fox Corp. is set to expire on Jan. 31,” the streaming device pioneer said in a statement. “We offered Fox an extension so that Roku can continue to bring a large and valuable audience to Fox. If an agreement is not reached, we will be forced to remove Fox channels from the Roku platform.”

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Last-minute TV carriage disputes among pay-TV distributors and content holders have become customary, especially ahead of a marquee events such as the Super Bowl or NCAA March Madness. Roku has now brought the negotiation tactic to streaming video.

Fox said Roku’s last-minute strategy was a “poorly timed negotiating ploy” aimed at driving more favorable contract leverage.

“Roku’s threat to delete Fox apps from its customers’ devices is a naked effort to use its customers as pawns,” Fox said in a statement.

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On its Twitter social media app, Roku said people could still stream Fox programming through Fubo TV, Sling TV, Hulu With Live TV, and YouTube TV, among others.

“Many of these services offer a free trial,” Roku tweeted.

Roku, which ranks as the No. 1 streaming device ahead of Amazon Fire TV, Apple TV and Google Chromecast, reported $179 million in ad-generated platform revenue in the most-recent fiscal period.