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Roku's Free Streams Go Outside the Box

Jeff Baumgartner

Adding ammo to its thriving online advertising business, Roku Inc. has launched a version of The Roku Channel -- its free, curated mix of long-form VoD content and a selection of live, linear channels -- on web browsers.

The launch broadens Roku's reach beyond its own streaming universe amid heated platform competition from the likes of Amazon.com Inc. (Nasdaq: AMZN) (Fire TV), Google (Nasdaq: GOOG) (Android TV, Chromecast adapters and Chromecast built-in), Apple Inc. (Nasdaq: AAPL) (tvOS) and home-grown TV operating systems from LG Electronics Inc. (London: LGLD; Korea: 6657.KS) (webOS) and Samsung Corp. (Tizen). The move extends The Roku Channel beyond the company's own players and integrated Roku TVs, and builds on its plan to launch the service on Samsung smart TVS that run Tizen.

To access The Roku Channel on browsers running on laptops, tablets and smartphones, users need only to create a new or use their existing Roku account.

With its move to the web, The Roku Channel has picked the green pill to see how deep this rabbit hole of OTT advertising goes.
With its move to the web, The Roku Channel has picked the green pill to see how deep this rabbit hole of OTT advertising goes.

Bringing The Roku Channel -- an offering launched last September that's now a top five channel on a platform with more than 5,000 channels/apps -- to the web should pump even more life into Roku's already fast-growing Platforms division. That unit is led by advertising and also includes OS licensing and subscription revenue sharing.

In the second quarter, Roku Platforms revenues ($90.3 million, up 96% year-on-year) has well surpassed Player revenues ($66.5 million, up 24% year-on-year). Roku's Q2 results, with total revenues rising 57% to $156.8 million, handily beat expectations, causing shares to jump about 22% by mid-day trading Thursday. (See Roku Pumps Up the Volume .)

Roku won't break down how much Platforms revenues are directly attributable to The Roku Channel, but they are a "material contributor" to overall company ad sales, company CEO Anthony Wood said on Wednesday's call. Roku hopes to build on that as The Roku Channel debuts in Canada and is introduced in other geographies, he said.

Other Roku metrics also show that its streaming business is healthy and growing.

Active accounts in Q2 shot up 46% to 22 million, while streaming hours climbed 57% to 5.5 billion hours. The average revenue per user also rose 48%, to $16.60, driven by advertising.

— Jeff Baumgartner, Senior Editor, Light Reading

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8/21/2018 | 3:08:45 PM
Re: New on Roku
I checked out the channel after reading this story. Roku is serving ads with this content, but not for itself. This has become another avenue for ad views for advertisers. I'm sure they'll be gathering user data as well.
8/21/2018 | 1:31:29 PM
Re: New on Roku
I too have been a long time customer with both a smart TV and a streaming "stick." It seems they may be the mouse that roared as "Roku metrics also show that its streaming business is healthy and growing," while it's not common to see brand advertising anywhere except to it's existing customers and news reports which don't cost them anything. Seems like a pretty scrappy company keep customers happy with it's products and services.
8/11/2018 | 5:24:43 PM
New on Roku
This is an interesting strategy. I've been a longterm Roku owner and watched them steadily promote the Roku channel to existing users. I'm really curious about the end goal for this project.
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