Roku Launches Ad Studio Ahead of TV Upfronts 

Roku March 23 announced the launch of an advertising brand studio to produce new creative ad formats and TV programming tailored for marketers.

The advertising brand studio will help marketers go beyond the traditional 30-second TV ad spot and amplify big moments in the marketing calendar, including advertiser-commissioned short-form TV programs, interactive video ads, and other branded content on The Roku Channel.

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“The shift to TV streaming has accelerated and leading advertisers are going beyond the 30-second ad,” Dan Robbins, VP of ad marketing, said in a statement. “We’re excited to … create streamer-first campaigns on America’s No. 1 TV streaming platform.”

In launching the studio, Roku has completed an agreement with the Funny Or Die Branded Entertainment division in which a number of the company’s branded content team members will join Roku. Industry veterans Chris Bruss and Brian Toombs from Funny Or Die and Rachel Daly Helfman from Snap Inc. will join Roku’s Patrick Colletto in leadership roles for the advertising brand studio. The executives have crafted award-winning content for advertisers such as Kroger, Lyft, Ralph Lauren, Wendy’s and more.

TV streaming has creative flexibility that goes beyond what traditional linear TV can offer to marketers. The new advertising brand studio will build on Roku’s existing offerings, which include sponsorships and native ads such as this year’s TurboTax partnership that will bring the 2021 March College Hoops Hub to life in TV streaming. In partnership with Roku, the brand built a College Basketball Game Guide on the Roku platform that not only unlocked free college basketball content for streamers, but also invited streamers to try to beat the buzzer across their TV and phone with an augmented reality lens.

Immersive branded experiences drive incremental value for both marketers and consumers today. A 2020 study by MAGNA, Roku and IPG Media Lab, “Valuing the Value Exchange,” found that these branded experiences, alongside video advertising, generate 4X greater purchase intent than video advertising alone.

“Branded experiences on the Roku platform helped us shift ad budgets quickly to TV streaming and go beyond traditional advertising to move the needle on purchase consideration,” said Lisa McQueen, media manager of Lexus. “We’re thrilled to collaborate with Roku for a world-class, hands-on production experience for our streaming TV advertising campaigns seen by millions of streamers.”

Roku will unveil additional details, partners and advertising projects at its IAB NewFronts presentation on May 3.

Roku Acquires ‘This Old House’ Business

Roku has acquired the “This Old House” business, including its global distribution rights and all of its subsidiary brands, including the “This Old House” and “Ask This Old House” TV programs, the show libraries, all digital assets, and the television production studio.

“This Old House” and “Ask This Old House” were the two top-rated home improvement programs in the United States in 2020, according to Nielsen data, and have earned a total of 19 Emmy Awards and 102 nominations, according to a Roku press release. Past seasons of “This Old House” and “Ask This Old House” are already available for free on The Roku Channel through both linear and on demand programming. Current seasons (“This Old House” season 42 and “Ask This Old House” season 19) are available for free on The Roku Channel as on demand episodes after they air on local PBS stations.

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“As the top-rated home improvement programs in America, ‘This Old House’ has the broad appeal that is perfectly suited to support The Roku Channel’s ad-supported growth strategy,” Rob Holmes, Roku VP of programming, said in a statement. “‘This Old House’ created the television home improvement genre and is beloved by millions of fans. We are thrilled to welcome this incredible team, and we could not be more excited to help grow the brand for an entire new generation of home improvement enthusiasts.”

“The passion of the craftspeople on ‘This Old House’ is matched only by its viewers, and we take great pride that over the past four decades we have helped them improve their most valuable asset — their home,” Dan Suratt, CEO, This Old House Ventures, said in a statement. “Roku is not only the No. 1 TV streaming platform in America, it also represents the future of TV, and we could not think of a better home for ‘This Old House’ to grow and to continue its leadership position in the home improvement genre.”

“This Old House,” which marked its 40th Anniversary in 2019, has broad distribution that “enables fans to find the authoritative voice in home improvement on their platform of choice, and makes the shows an ideal partner for leading national brands seeking to reach the attractive home improvement consumer segment,” stated the Roku press release.

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Roku plans to expand both the production and distribution of the “This Old House” brand, according to the press release.

Roku acquired TOH Intermediate Holdings, which owns the “This Old House” business, from TZP Group. The executive team of “This Old House” will join Roku, including CEO Dan Suratt. Financial terms of the acquisition were not disclosed.

News Analysis: AVOD Upping Content Game

As subscription streaming services HBO Max and Paramount+ prep lower-cost, ad-supported consumer options, free ad-supported platforms are entering the original content arena and targeting a growing audience that eschews pay-TV and is not interested in substituting the cable bill with multiplying SVOD fees.

Pluto TV, the AVOD unit owned by Paramount’s corporate parent ViacomCBS, is eyeing a cross-pollination of original content migrating between its 22 million average monthly viewers and SVOD Paramount+. Fox Corp.’s Tubi is eyeing funding lower-budget original movies and TV shows. The platform saw viewership jump 58% in 2020, including 33 million average monthly viewers throughout the fourth quarter. More importantly, viewers consumed 750 million hours of content in the second quarter, which was 70% higher than the previous corresponding period.

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CFO Steve Tomsic told a recent Wall Street investor group Tubi represents the “broadening of the future” for network television, and said he would consider original programing in an attempt to increase ad revenue, which is expected to reach $300 million this year and $1 billion annually in the near term.

“It’s often these really cost-effective titles that a lot of the viewership resides in,” Tomsic said, adding that Fox content assets such as “The Masked Singer” are being co-distributed on Tubi to give the platform an “extra special” edge, and the platform more “breadth” in terms of content.

“Don’t expect us to invest in really meaningful ways in terms of scripted entertainment dramas that come with huge price tags and are really difficult to make work out of the economics of broadcast television,” Tomsic said.

Meanwhile, Roku, which helped co-launch the SVOD market in 2008 with Netflix, is eyeing original content for The Roku Channel, the company’s branded AVOD platform. As of the fourth quarter of 2020, Roku reported 51.2 million monthly active users in the U.S. This figure is the company’s highest-ever active quarterly user total.

To keep those eyeballs returning, Roku is beginning to dip its toes in original programming. The platform March 19 launches “Cypher,” an FBI series featuring seven, one-hour episodes and available free to viewers of The Roku Channel. The AVOD will also become the exclusive destination for more than 75 premium shows and documentaries acquired from short-lived SVOD platform Quibi.

March 18, Roku announced it would kickoff the IAB’s official 2021 NewFronts Lineup on May 3 as the week’s first presenter to media buyers.

“We’ve seen first-hand the role that TV streaming has played in consumers and marketers lives in the last year,” Alison Levin, VP of global ad revenue and marketing solutions at Roku, said in a statement. “Roku is thrilled to kick-off the first presentation at IAB NewFronts once again this year and looks forward to sharing how marketers can buy TV like you watch TV.”

In February, AVOD service Crackle Plus announced that production had begun on season two of its original series “Going From Broke,” the unscripted show spotlighting the financial epidemic of student loan debt executive produced by Ashton Kutcher and hosted by Chegg CEO Dan Rosensweig.

Crackle corporate parent Chicken Soup for the Soul Entertainment operates several ad-supported streaming services (PopcornFlix, Frightpix, faith-based Truli, Espannolflix), with an eye on streaming original and under-the-radar programming to a growing user base.

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, says the AVOD market offers programmers and advertisers two options: lower-priced subscription plans such as $5.99 Hulu and pending HBO Max and Paramount+. These AVOD editions are typically limited to delivering no more than three to four minutes of ads per hour. By comparison, completely free platforms such as Tubi, Pluto TV, Amazon’s IMDb TV and Crackle can advertise as much as 10 to 12 minutes per hour.

“There’s room for both business models,” Pachter said in an email. “[Crackle buys] produced content for exclusive streaming windows. Really innovative.”

‘Demand Africa’ Streaming Service Launches on The Roku Channel Offering African Diaspora Programming to the U.S.

Demand Africa, a streaming video on-demand service that hosts a variety of original and acquired content from the African Diaspora, has launched a subscription service on The Roku Channel. The service includes thousands of hours of content from distributors and producers on the continent and throughout the diaspora.

Current programming includes original lifestyle series “Africa on a Plate,” “Care for Color,” “Muziki Ni” and “Minjiba Entertains”; dramas “Battleground and Tinsel,” “Jacob’s Cross,” “The Herd” and “Heist”; and comedies “Africa Laughs,” “Hustle Lagos” and “B&B.” The service also provides access to a curated selection of Black and African films from Nollywood, across Africa and other parts of the world.

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“Our mission at Demand Africa is to bridge cultures and connect Black audiences and the African diaspora to the continent,” Dean Cates VP of digital strategy, Demand Africa, said in a statement. Roku is a fantastic partner with the ability to deliver multicultural programming to the mainstream.”

Roku is the No. 1 TV streaming platform in the U.S. by hours streamed (Kantar, November 2020). In Q4 2020, The Roku Channel reached U.S. households with more than 61 million people.

Randy Ahn, director of The Roku Channel SVOD, said the platform is focused on getting users to the entertainment they want. He said Demand Africa is a “wonderful” addition to the service’s premium subscription lineup as it offers customers access to diverse Black content and a representation of contemporary high-quality global Black and African content.

“We’re very excited to partner with Demand Africa … and help our users connect with new content,” Ahn said.

The Roku Channel Launching Original Series ‘Cypher’ in North America

Roku is slowly expanding from streaming video facilitator to content distributor. The media technology company March 11 announced that a new scripted series, “Cypher,” will premiere exclusively on The Roku Channel March 19. The FBI drama features seven one-hour episodes and will be available for the first time to viewers in Canada.

“Cypher” follows top FBI cryptanalyst Scott (Martin Dingle Wall), who is enlisted to crack a coded document, which is revealed to be a hit list. Scott soon finds himself in the crosshairs of bad guys who want their list back. He must navigate the murky waters of loyalty and betrayal among an underground ring of hackers, hit men and FBI agents — all as the clock ticks in pursuit of the latest targets.

The series also stars Eve Mauro, Brian Krause, John Reardon, Mary Helen Schmidt, Jaclyn Hales, Lauren Gravitt and John J. Jordan.

“As The Roku Channel continues to grow, we’re constantly looking for ways to elevate the streaming experience for our viewers and get them to great entertainment easily and for free,” Sweta Patel, VP of engagement growth marketing at Roku, said in a statement.

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The Ad-supported Roku Channel content lineup features more than 40,000 movies and programs and more than 165 live linear-TV channels in North America. As of the fourth quarter of 2020, Roku reported a total of 51.2 million monthly active users in the United States.


Roku CEO: AVOD Growth Drove Quibi Content Acquistion

When Roku in January 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 and GM of 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

Roku crushed fourth-quarter and fiscal-year results for the period 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. The previous year, 38% of all smart-TVs sold in the United States 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 coronavirus pandemic. Q4 player revenue growth rate was more aligned with the period before the 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 with $741 million the year before. Net income surpassed $67.3 million compared with 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 the year before.

“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.


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.

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, 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 out 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 9 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.”

The Roku platform (together with Fire TV) had been instrumental to Max precursor HBO Now acquiring 8 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.