Roku CEO: AVOD Growth Drove Quibi Content Acquistion

When Roku last month announced it had acquired streaming rights to 75 original shows from the shuttered Quibi SVOD platform, little reason was given why the CE manufacturer coveted short-form scripted series, alternative and reality programming featuring Idris Elba, Kevin Hart, Liam Hemsworth, Anna Kendrick, Nicole Richie, and Chrissy Teigen, among others. In addition to titles previously premiered on Quibi, more than a dozen new programs will make their debut on The Roku Channel.

Speaking on the Feb. 19 fiscal call, Roku founder/CEO Anthony Wood said the content acquisition underscored the burgeoning growth of ad-supported VOD. Wood said growth of The Roku Channel is twice as fast as the Roku platform, ending 2020 with 63 million monthly viewers.

Anthony Wood

“As our scale grows, we are looking, sourcing different types of content,” he said, alluding to the addition of 100 content channels to the streaming VOD platform in 2020.

“The Quibi deal fits into that, in a sense that it’s premium content that we think will appeal to Roku viewers,” Wood said. “It was a transaction where we acquired the global content rights on a cost-effective basis.”

The executive said AVOD helps content owners and publishers distribute their content in a cost-effective alternative manner to broadcast TV, which he said saw a 21% decline in primetime ratings last year, according to Nielsen.

When asked why an advertiser would market directly with Roku rather than an over-the-top video distributor like Peacock or Hulu, Scott Rosenberg, VP, GM, Platform Business, said it’s a matter of reaching target vs. large audiences.

“If you buy ‘The Office,’ you buy a specific show [and] you’re going to do that directly with the network,” he said. “But if you’re optimizing for reach and frequency and performance, investing with Roku is a key factor.”

“There is a lot of content out there, it’s available on a lot of different business models,” added Wood. “Content owners are looking for ways to monetize their content. We have multiple ways to do that.”



Roku Topped 51 Million Active Accounts; Users Streamed 58.7 Billion Hours in 2020

As expected, Roku crushed fourth quarter and fiscal year results, ended Dec. 31, 2020, as consumers increasingly seek over-the-top video entertainment in the home during the pandemic.

The SVOD market co-founder Feb. 18 said it added 14.3 million incremental active accounts in 2020 to reach 51.2 million at year end. That’s up 39% from 36.9 million accounts in the previous-year period. Streaming hours increased by 20.9 billion hours to a record 58.7 billion. Last year, 38% of all smart TVs sold in the U.S. were Roku models, with CE manufacturer’s branded operating system the No. 1 smart TV operating system in the U.S.

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For the full-year, streaming player unit sales grew 28%, resulting in device revenue increasing 32% from 2019. Player sales were especially strong in Q2 and Q3 due in part to consumers spending more time at home due to the COVID-19 pandemic. Q4 player revenue growth rate was more aligned with the period before the COVID-19 pandemic.

The company said its branded AVOD platform — The Roku Channel — drew 63 million users in Q4, up more than 100% from the previous-year period. Since acquiring global content streaming rights to shuttered SVOD service Quibi, Roku plans to begin rolling out content on the AVOD platform later this month.

Quarterly revenue exploded more than 81% to $471.1 million from $259.6 million in the previous-year period. For the fiscal year, revenue topped $1.26 billion compared to $741 million last year. Net income surpassed $67.3 million compared to a loss of $15.7 million in the previous-year period. For the year, fiscal loss narrowed to $17.5 million from a loss of $59.9 million last year.

“TV streaming is a global phenomenon and in 2020 Roku continued to successfully expand beyond our domestic market using the same business model, capabilities and products that have worked so well for us in the U.S.,” Founder/CEO Anthony Wood and CFO Steve Louden wrote in the shareholder newsletter.


Fox Rolling Out ‘Free Like Tubi’ Weeklong AVOD Promotion

Tubi, the AVOD platform Fox Corp. acquired in 2019 for $440 million, is mounting a week-long promotional campaign — dubbed Free Like Tubi — with third-party services and consumer electronics manufacturers, to attract viewer eyeballs.

Beginning Feb. 8, Tubi will sponsor ad-free listening through the week on streaming music provider Pandora. Listeners will have free “Video Plus Access” throughout the week. Tubi will give mobile app players free rewards on mobile game provider Zynga if users watch and engage with sponsored Tubi video content.

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Additional cross promotions include unlocking the paywall on Ad Age and giving readers complimentary access. Beginning Feb. 9, Tubi and Postmates will launch a “National Pizza Day” partnership to celebrate the special day and Free Like Tubi Week in New York, Los Angeles and Chicago. On Feb. 10, Tubi will host free Amazon Fire TV 4K with Alexa Voice Remote device giveaways.

On Feb. 11, Tubi will partner with “The Ellen Degeneres Show,” where one audience player takes a popcorn quiz and goes on a search for the correct title in a huge bucket of popcorn. Additionally, 100 winners on Ellen’s IG (@theellenshow) stories will receive Visa gift cards courtesy of Tubi.

On Feb. 13, Tubi will give away one Vizio 55-inch V-series SmartCast TV and one Vizio V-series V21-H8 Soundbar. The next day, Tubi and Spotlight Cinema Networks will celebrate Valentine’s Eve with free concessions for the first 20 moviegoing cars at the Arena Cinemalounge in Hollywood, The Frida Cinema in Los Angeles, as well as the Skyline Drive-In and Plaza Cinema & Media Arts Center in New York City.

Tubi will host free Roku Express device giveaways on Feb. 14. On Feb. 15, to wrap up the campaign, Guillermo from “Jimmy Kimmel Live” will treat the audience to free giveaways. Additional swag giveaways include “The Masked Singer” (@MaskedSingerFox), “The Masked Dancer” (@MaskedDancerFox) and “Name That Tune” (@NameThatTune).

Amazon’s IMDb TV Joining Roku Platform

In a surprise move, the Amazon-owned ad-supported VOD service IMDb TV is getting app placement on the Roku platform. IMDb TV is a direct AVOD competitor to The Roku Channel. The Roku platform had more than 51 million registered accounts at the end of 2020.

IMDb TV, which is also available to 50 million registered accounts on Amazon Fire TV and Amazon Prime Video service, has moved up the ladder against Roku, ViacomCBS’s Pluto TV, Fox Entertainment’s Tubi and NBCUniversal’s Peacock in the the increasingly competitive AVOD market.

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IMDb TV original content includes spy drama “Alex Rider” and “Moment of Truth,” among other licensed fare from Amazon Studios and third parties.

“We are thrilled to provide customers a seamless and easy way to view our content with the distribution of our IMDb TV app on millions of Roku devices,” Mark Eamer, VP of IMDb TV, OTT and brand advertising, said in a statement.

WarnerMedia Extends HBO Max Discount Pricing

WarnerMedia has quietly extended to March special pricing for subscribers willing to prepay for 12-months of HBO Max service. The service, which traditionally costs $14.99 — the most expensive SVOD on the market — is effectively charging $11.66 monthly for subs paying the annual $69.99 charge.

Since launching May 27, 2020, HBO Max has aggressively sought to boost sluggish subscriber growth that tallied just 8.6 million subs through Sept. 30, 2020 (upped to 12.6 million in December). WarnerMedia now combines Max subs with HBO to boast more than 38 million members.

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The growth was hampered from the start when WarnerMedia failed to secure distribution through Roku and Amazon Fire TV — two major consumer gateways to third-party SVOD services. The Max app is now available on both platforms.

“We’re breaking new ground in the months ahead, and we can’t wait to work with our longtime partners at Roku to build on our past successes and bring Max’s entertainment to Roku’s large and highly engaged audience,” Tony Goncalves, chief revenue officer at WarnerMedia, said in a statement last month.

CES: China’s TCL to Launch More-Affordable 8K Televisions

Next-generation 8K high-definition televisions have been around for a while, typically priced out of reach of a consumer indifferent to a marginally (compared with 4K UHD) improved display screen in a market with scant 8K content (movies an TV shows) available.

China’s TCL is looking to change consumers’ attitudes to 8K with an upcoming slate of 6-series Roku televisions (reportedly priced less than $2,000) with big screens, improved operating system, LED-backlit and AiPQ advanced picture engine, among other features.

TCL is also bowing a series of 85-inch televisions in 4K UHD with Roku model, a more expensive QLED unit, and 8K model with OD Zero Mini-LED lighting.

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In addition to making 8K more accessible, TCL will debut The XL Collection — the company’s first lineup of 85-inch displays. Three different models will make up the XL Collection this year and each 85-inch TV will feature performance levels for every kind of home theater. From a simply smart 85-inch 4-Series TCL Roku TV that delivers the easiest way to enjoy 4K HDR streaming and an 85-inch 4K HDR TCL Roku TV with QLED picture quality to the ultimate 85-inch mini-LED powered 8K TCL TV with QLED wide color technology, the XL Collection will fit any budget and exceed the highest performance standards to deliver larger-than-life home entertainment.

“Last year was a unique one for TCL, but through it all, the team never lost sight of its goal to become America’s preferred consumer electronics brand and maintain its status — the number two selling brand of television in the United States,” Chris Larson, SVP of TCL, said in a statement. “While our TVs are getting bigger, better, brighter and more accessible, our other categories like audio, mobile phones and home appliances continue to thrive as well.”

Roku Says Its Smart -TV Operating System is No. 1 in the U.S. and Canada

Roku Jan. 8 announced that its operating system was the No. 1 smart TV OS sold in the United States. and Canada, according to NPD’s Weekly Retail Tracking Service. Roku TV held 38% of market share in the U.S. and 31% in Canada, based on available data from Jan. 5 through Dec. 26, 2020, maintaining the lead spot in both regions. In North America, millions of Roku TV models were sold across thousands of retail stores offering consumers hundreds of models to choose from in a range of sizes and picture quality options — from 24-inch HD to 75-inch 4K HDR models.

Chinese-made Roku TV models feature a simple home screen to enable consumers to easily access thousands of free and paid streaming channels, plus advanced features like fast search across top channels and voice compatibility for Alexa, Siri and Google Assistant-enabled smart devices. The easy-to-use remote, automatic software updates and seamless audio integration offers added convenience.

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Expanding the Roku TV Ready ecosystem further, Roku unveiled a new wireless reference design for consumer electronics brands. This new wireless soundbar reference design uses Roku’s proprietary audio technology to connect with any Roku TV model wirelessly, offering audio and video synchronization, making it easier for Roku TV customers to add audio to their TV experience.

The new reference design will enable consumer electronic companies to build and sell wireless soundbars under their own brand. TCL is expected to launch the first wireless soundbar and will announce device specifics at their CES 2021 event on Jan. 12.

Roku TV models are available from more than 15 TV OEM brands and today can be found in the U.S., Canada, U.K., Mexico and Brazil.

In the United States, Element will launch a 2.0 Roku TV Ready Soundbar and 2.1 Roku TV Ready Soundbar + Subwoofer later this month. Element joins TCL, Hisense, Enclave, Sound United & Bose who all released Roku TV Ready certified audio products in the U.S. in 2020. Roku aims to expand the availability of Roku TV Ready program internationally and will announce partners and products by country at a later stage.

“We are proud to power the smart TVs that are most frequently purchased in the United States and Canada,” Mustafa Ozgen, SVP of account acquisition at Roku, said in a statement.


Roku Acquires Quibi’s Global Content Distribution Rights

Roku Jan. 8 announced that its ad-supported branded streaming platform, The Roku Channel, will become the exclusive home to more than 75 shows and documentaries shuttered SVOD service Quibi created in conjunction with Hollywood studios and production companies. Roku acquired the exclusive global distribution rights to the award-winning shows and will make the content available for free to all Roku users.

Following an internal restructuring by Quibi, Roku acquired Quibi Holdings, LLC, the company that holds all of Quibi’s content distribution rights. Financial terms of the transaction were not disclosed.

Launched last April by DreamWorks Animation founder Jeffrey Katzenberg and eBay founder Meg Whitman, the $1.75 billion-backed service featuring short-form video no longer than 10 minutes, announced after just six months it was ceasing operations — citing in part consumer indifference.

The Quibi content includes Emmy award-winning scripted series, alternative and reality programming and documentaries featuring stars such as Idris Elba, Kevin Hart, Liam Hemsworth, Anna Kendrick, Nicole Richie, Chrissy Teigen, and Lena Waithe. In addition to the full range of titles that had previously premiered on Quibi, more than a dozen new programs will make their exclusive debut on The Roku Channel.

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The Roku Channel is the AVOD home for free and premium news and entertainment and in Q4 2020 reached U.S. households with an estimated 61.8 million people. The Roku Channel experienced rapid growth in Q4 2020 doubling household reach year over year and was a top 10 channel in both streaming hours and active accounts.

The transaction aims to deliver a distinctive array of premium content geared towards the highly coveted 18-35 age demographic, further building out The Roku Channel’s lineup of more than 40,000 free movies and programs and 150 free live linear TV channels.

“The Roku Channel is one of the largest and fastest growing channels on our platform today and we are consistently expanding the breadth and quality of our free, ad-supported content for our users,” Rob Holmes, VP of programming at Roku, said in a statement. “Today’s announcement marks a rare opportunity to acquire compelling new original programming that features some of the biggest names in entertainment.”

“Quibi championed some of the most original ideas and inventive storytelling, and I’m so proud of what I was able to create for the platform,” said Veena Sud, creator, writer, director and executive producer of the series “The Stranger.”


Roku Surpassed 50 Million Active Accounts; Users Streamed 58.7 Billion Hours in 2020

Roku Jan. 6 announced preliminary estimated data for the fourth quarter (ended Dec. 31, 2020) of 51.2 million active accounts — up by approximately 14 million accounts in 2020. The company also announced an estimated 17 billion streaming hours in the fourth quarter for a total of 58.7 billion hours in 2020, an increase of 55% from the previous-year quarter and the full year.

Roku, which co-created the subscription streaming video market with Netflix in 2008, said nearly a third of U.S. households have cut traditional pay-TV. Furthermore, eMarketer predicts that by the end of 2024, fewer than half of U.S. households will subscribe to a traditional pay-TV service.

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“The world is moving to streaming and we look forward to continuing to help viewers, advertisers, content publishers, and TV manufacturers succeed in the ‘streaming decade,'” CEO Anthony Wood said in a statement.

Additional milestone celebration highlights can be found on the Roku blog. In February, Roku will report final operating metrics and financial results for the fourth quarter and full year 2020.

Samsung, Roku, Sonos Among Top Brands in NPD’s Consumer Electronics Awards

The NPD Group’s technology division announced the winners of its annual Consumer Electronics Industry Performance Awards, honoring Samsung for its LCD TVs, Sonos for its soundbars and Roku for its streaming media player, among other companies.

Among the top increases in market share in North America, Samsung took the top prize for LCD TVs. Among the fastest-turning brands per item in the United States, Canada and Mexico, Sonos was the top U.S. soundbar. And among the top increases in online market share in the United States, Roku was the top streaming media player.

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“After an unprecedented year, we at NPD are excited to take a moment to acknowledge the many silver linings the consumer technology market experienced in the midst of the pandemic,” Ian Hamilton, president, technology sector, The NPD Group, said in a statement. “In this fifth year of our CE Industry Performance Awards we are recognizing brands that saw success providing consumers with products that enabled them to work and learn from home, as well as stay entertained and connected in their downtime. Congratulations to all award winners — we wish everyone a healthy and successful 2021.”