Roku Ratchets Up On The Back Of Adaptation And Evolution

May 11, 2019
Posted in Content, Tech
May 11, 2019 Kate Neale

Roku Ratchets Up On The Back Of Adaptation And Evolution

Roku continues to demonstrate the avalanche trend of viewer’s consumption of television online with Q1 numbers consolidating the growth achieved in recent years. Their growth continues in all measurable areas:

  • Added two million active accounts for a total of over 29 million (10 million accounts added in the last year)
  • One in three smart TV’s sold in the US is now Roku, surpassing Samsung
  • RPU up from $19.95 last year to $19.06
  • Revenue up 85% from $225 million to $417 million
  • Average active user watching 3 hours and 20 minutes per day – 8.9 billion hours of streaming!

Unlike Australia, the US content marketplace is saturated, with an abundance of FTA, cable and streaming services, most of which screen a diet of predominantly local (US produced) content. One could argue 350 million US viewers vs 25 million AUS viewers, but that’s irrelevant to the observation. As consumer’s adoption of OTT/CTV offerings gain momentum, a re-calibration of where content lives has been irreversibly set in motion.

Roku (meaning six in Japanese) began in 2002 as a set top box offering and has evolved into the number one OTT streaming media player in the US, with the Roku channel being the 5th most popular. In the face of steep competition they have achieved their growth pursuing their own strategy of evolving technology and timely adaptation.

Keeping pace with consumer tolerances through a dynamic period of change requires an adept skill of judging which of the technological advancements the consumer is willing to adapt. They entered the market with a set top box and gradually progressed to a streaming platform.

Discerning essential innovation through technology without getting ahead of yourself, is another prerequisite of survival and success in an industry undergoing disruption. Television is a consumer, content and advertiser driven synergistic microcosm. Roku has made measured moves to introduce technology that facilitated an improved user experience and solid relationship with the viewer, while providing the advertiser the data and access to eyeballs that delivered results.

As they approach 30 million active accounts, Roku is eyeing growth through partnering with other streaming platforms such as Viacom owned Pluto TV and international territories. Their mobile aspirations are yet to be fully exposed but I expect they’re keeping pace with the need.

The observation to note from Roku’s growth at this time, are that they seem to have a measured but proactive adaptive response to a dynamic market landscape. Consumer demand will continue to shift from linear to more on demand occasion driven content consumption via OTT and intensive use of different devices.

Advertisers will increasingly drive the revenues for each OTT/CTV streamer and their choices will be driven by the depth and breath of the supplier’s relationship with their target consumer.

Roku are well positioned to capitalise on their attributes of market penetration, content appeal, consumer relationship and synergy with advertisers needs.

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