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 Vudu.com 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.

 

NAB Show to Bow ‘Streaming Experience’ Content Showcase

The NAB Show is introducing The Streaming Experience, a new content showcase curated by streaming and online video expert Dan Rayburn that will feature more than 50 OTT platforms and streaming devices.

The showcase, which will give NAB Show attendees a first-hand look at the latest streaming video services, according to organizers, will be located in the Central Lobby of the Las Vegas Convention Center and is open to all registered attendees during exhibit hours starting April 19.

The NAB Show takes place in Las Vegas April 18-22.

A living-room setting will allow attendees the opportunity to test OTT services side-by-side to compare content, video quality, ad formats, playback features and delivery methods. The Streaming Experience will feature hardware from Amazon, Apple, Roku, Xbox, PlayStation, LG, TCL and Samsung. Streaming services on display will include Apple TV+, Amazon Prime Video, CBS All Access, Disney+, Hulu, NBC Sports, Netflix and YouTube TV, among others. New services from HBO Max, Peacock and Quibi may also be showcased, dependent on their launch dates, according to organizers.

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“Streaming is a major focus of the 2020 NAB Show, and the new Streaming Experience is the largest showcase of its kind in the industry,” said NAB EVP of conventions and business operations Chris Brown in a statement. “We are excited for attendees to join their industry peers in this living room environment and experience nearly every live and on-demand streaming service on the market today.”

Additional details of the Streaming Experience, including renderings of the new space, can be found here.

 

Analyst: Amazon Fire TV Users Prefer Streaming Netflix

Amazon Fire TV and Roku continue to spearhead the streaming media device market in the United States and select foreign markets. New data from Ampere Analysis contends Roku has a key leadership position in both the U.S. and in Canada — although Amazon is “hot on Roku’s heels” in both countries.

While Fire TV is the leading device in many of Amazon’s retail markets and has a market share of over 40% in both Germany and Japan, it still trails Roku in the U.S. Indeed, among domestic Fire TV users, the slight majority prefer to stream Netflix than Prime Video.

Ownership of Google Chromecast is high in the Nordics and Netherlands, which lack any serious Amazon retail presence. Google has over 50% market share in Netherlands and Denmark.

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Device owners show subtle differences in the streaming services they rely on, reflecting device owner strategies, interfaces and the products they promote.

Although Netflix is still the key service for Fire TV owners in the U.S., Amazon device homes are more likely to subscribe to Prime Video and HBO Now compared to Roku device owners.

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By contrast, Roku device owners show a slight skew towards Hulu and Netflix compared to Fire TV households.

Finally, Sweden tops all countries for household streaming media device penetration at 55%. That compares to Denmark, the U.K. and U.S. at 51% household penetration.

“More than any other sector, the streaming adapter market is a competitive battleground for companies with wildly different strategic imperatives — ranging from Amazon and the support which Fire TV provides for its retail operations, Apple and its high-end device ecosystem, Google and its advertising businesses, and Roku and its mix of monetization mechanisms,” Minal Modha, consumer research lead at Ampere Analysis, said in a statement.

 

Roku Adds Surround-Sound to Branded Speakers

Roku Jan. 29 announced a software update that will enable surround sound expansion of its branded soundbars, making it easy for consumers to use Roku TV Wireless Speakers.

Walmart will also be expanding its “onn.” Roku surround system with the addition of Roku wireless surround speakers, expected on Walmart shelves and Walmart.com in February.

“We want to simplify home theater the same way we simplified streaming and we’re taking a big step towards that by expanding our Roku Smart Soundbars to support surround sound capabilities,” Mark Ely, VP of retail product strategy at Roku, said in a statement. “We want customers to be able to expand their system over time without having to spend a lot of money or run wires throughout the home.”

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Roku’s soundbar is marketed as a cost-effective two-in-one device that enhances sound and streaming video to a TV.

“Customers are responding well to our onn. brand,” said Ryan Peterson, VP of consumer electronics for Walmart. “Roku is known for their quality and affordability as well, and we’re looking forward to offering our customers a premium surround sound experience.”

The Roku Smart Soundbar claims premium sound quality with crisp dialogue and dynamic bass, easy-to-use 4K and HDR Roku streaming player built in, simple set up and a remote with TV power and volume buttons.

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Roku wireless surround speakers can be placed behind the sofa or in the back of a room to provide immersive multi-directional sound. In addition, stereo content will sound better when adding rear speakers.

Roku soundbars support Dolby Audio, which delivers enhanced surround sound experience when streaming content from compatible platforms such as Netflix, the Apple TV app and Disney+, among others.

Roku Surround Sound capability will be available as a Roku OS software update for all Roku Smart Soundbars and will begin rolling out to devices in February.

The onn Roku Wireless Surround Speakers will be available for $149 in Walmart stores and online at Walmart.com mid-February to pair to the onn Roku Smart Soundbar and onn Roku Wireless Subwoofer.

 

Roku Goes to Brazil

Roku Jan. 21 announced its arrival in Brazil — nearly 18 years after bowing in the United States and 13 years after partnering with Netflix to pioneer the subscription streaming market.

“With the arrival of Roku, consumers in Brazil will now be able to enjoy their favorite TV programs and movies on the easy to use Roku platform. We want to bring streaming to everyone in Brazil,” founder/CEO Anthony Wood said in a statement.

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Wood, who had been a VP at Netflix, set about building a media device that connected the television to the Internet. Netflix was an initial investor, contributing $6 million in funding.

At the heart of the Roku platform is Roku’s proprietary operating system, the Roku OS. In 2014, Roku launched the Roku TV licensing program enabling Chinese TV partners to manufacture smart TVs.

In Brazil, Roku is partnering with AOC, a Taiwan-based multinational electronics company, to bring the AOC Roku TV to Brazilian consumers.

The new AOC Roku TVs include: 32-inch and 43-inch screens in HD with integrated wired and wireless connectivity.

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“TPV Group has an excellent relationship with Roku in the United States, and we are glad to bring this partnership to Brazil,” said Andre Romanon, head of marketing and product at TPV Brazil.

In Brazil, Roku will offer a streaming line-up with thousands of movies & TV episodes across 5,000 streaming channels available in the Roku Channel Store. Consumers can access the streaming channels directly from the home screen on their Roku TV.

A key part of Roku’s entertainment experience is to offer the best local content in each country where the company operates. In Brazil, Globoplay will be among the first local Brazilian streaming services available on the Roku platform. Through Globoplay on the Roku platform, consumers will be able to enjoy live TV, TV shows and top movies, on demand.

Globoplay is the largest Brazilian streaming platform that brings together internationally renowned movies and TV series, including exclusive productions that will only be available online, in addition to original Globo content.

“Roku is an important partner for Globoplay’s expansion plans. This will improve the experience for those who consume streaming content on TV, and it will bring more competition and quality to the market,” said Erick Brêtas, General Director of Globoplay.

In addition to Globoplay, consumers in Brazil will be able to enjoy entertainment from paid and free channels on the Roku platform, such as the Apple TV+ app; BabyFirst TV for young children; sports streaming service DAZN; audio streaming channel Deezer; Google Play; Happy Kids; HBO Go as well as HBO Latin America, including originals “Joint Venture” (Pico Da Neblina), “The Business” (O Negócio), PSI, and Magnífica 70, as well as movies, documentaries, HBO specials; Brazilian streaming service Looke; Netflix; Brazilian educational channel Playkids, featuring great content for children; and YouTube.

AOC Roku TV models will be available online on Jan. 22 in Casas Bahia, Ponto Frio and Extra, and in stores as of early February. The 32-inch AOC Roku TV will be priced at $1.199,00 Reais and the 43-inch AOC Roku TV will be priced at $1.599,00 Reais.

Roku Announces TV Brand Expansion, ‘Roku TV Ready’ Program

Roku announced that 15 TV brands will launch Roku TV models in Canada, Mexico, the United States and the United Kingdom in 2020.

Roku TV brands in 2020 include ATVIO, Element, Hisense, Hitachi, InFocus, JVC, Magnavox, onn., Philips, Polaroid, RCA, Sanyo, TCL and Westinghouse.

In Mexico, new partner brands InFocus, Polaroid and Walmart’s ATVIO will sell Roku TV models, while existing partner brand Westinghouse and others will extend their Roku TV offerings to Mexico. In addition, TCL and Hisense will expand their Roku TV offerings with new Roku TV models launching later in the year.

“2019 was a tremendous year for Roku TV, with more brands, retailers and consumers choosing the platform than ever before,” said Mustafa Ozgen, SVP and GM of account acquisition at Roku in a statement. “We believe that Roku TV represented more than one in three smart TVs sold in the U.S. during the first nine months of 2019, and the number of our licensees keeps growing.”

Roku also announced “Roku TV Ready,” a new program that allows consumer electronics companies to partner with Roku to help their products work seamlessly with Roku TV. The first partners under the program are TCL North America and Sound United, parent company to Denon, Polk Audio, Marantz, Definitive Technology and Classé, which will feature Roku TV Ready products for select brands later this year. Products under the program will display a Roku TV Ready badge on marketing materials to identify that they have been tested and certified to work with the Roku TV. Consumer electronics companies can add Roku TV Ready functionality at no additional cost to their products, according to Roku.

“Our goal is to make the TV experience incredibly simple, accessible and fun. Roku devices continue to delight millions of consumers for these reasons. And now with this new program we hope to make it super easy to setup and control soundbars and audio/video receivers using just a Roku TV remote,” said Mark Ely, VP, retail product strategy at Roku in a statement. “Meanwhile, consumer electronics brands benefit by offering their products in a more appealing way to our large and engaged audience of millions of active accounts.”

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“Denon is consistently at the forefront of technology trends and services. Our joining the Roku TV Ready program demonstrates a continued dedication to this ethos while offering consumers an incredible value, endless entertainment and new features delivered over time,” said Brendon Stead, SVP, product development at Sound United, parent company to Denon, in a statement. “The Roku TV Ready program enables Denon users to easily access Denon product features via the Roku TV Remote, among other features. In the name of seamless entertainment, this is a boon for watchers everywhere.”

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“TCL and Roku have been working to deliver incredible home entertainment innovation to consumers for many years and we’re thrilled to be extending our partnership to home audio compatibility,” said Chris Larson, SVP, TCL, in a statement. “As America’s fastest-growing TV brand, we’re focused on providing a first-class home theater experience and a big part of that is ensuring consumers know their TCL television will work well with other products throughout the home.”