The Drum Awards for Marketing - Extended Deadline

-d -h -min -sec

Roku Future of TV OTT

Why Roku aims to outpace the streaming industry around ads

Author

By Chris Sutcliffe, Senior reporter

August 5, 2021 | 5 min read

Hybrid streaming service provider Roku has reported results for the second quarter of the year. The announcement comes as more speculation about the future of the streaming ecosystem emerges in the light of Netflix missing its subscriber growth targets and the continued development of more options for streaming.

boss baby

The latest Boss Baby film is among the jewels in Roku’s content crown

According to the release, Roku’s total net revenue grew 81% year-on-year to $645m, while its platform revenue increased 117% year-on-year to $532m. Crucially in light of strained growth elsewhere Roku recorded an increase of 1.5m active accounts from Q1 2021, which takes the total number of active users to 55.1 million.

It did, however, see a decline in terms of hours of streamed content consumed: streaming hours were 17.4bn hours, a decrease of 1.0bn hours from Q1 2021. The company attributes that to the easing of restrictions around Covid-hit activities, though it also notes that it outperformed linear television globally in that respect.

roku linear tv

Roku is also keen to point out that it is well-placed to reap the benefits of what it terms the acceleration of spend from linear television advertising to OTT services.

It states: “Our success at this year’s Upfronts was driven by our ongoing ad innovation and competitive differentiators including The Roku Channel and the OneView Ad Platform.

“Roku secured commitments with all seven major agency holding companies earlier than ever and earned double the dollar commitment compared to last year. 42% of all advertisers who committed to Roku during the Upfronts were new upfront commitments.”

It is also prioritizing expanding the list of companies that have traditionally advertised on OTT services, noting that “the number of advertisers outside the Ad Age 200 grew over 50% year-on-year”.

Content considerations

The key point of differentiation for all streaming services is their exclusive content. The race to create or license originals remains fierce, particularly in light of the impact of Covid on the cinema industry.

In the release, Roku’s founder and chief executive Anthony Wood and its chief financial officer Steve Louden cite the change to day-and-date releases with cinemas as having a positive impact on Roku’s viewership figures. Both Disney live-action reboot Cruella and the latest entry in the Boss Baby franchise are mentioned as examples.

Outside of cinema releases, Roku is also benefiting from live sport coverage with its Olympics partnership, and claims good figures from its slate of Roku Originals. Roku bought up the stock of Quibi content following the short-form video platform’s failure earlier this year, and has rebranded its shows for the service. Other commissioned shows have received orders for second seasons on the Roku channel, including Die Harter with Kevin Hart.

While content is the lure with which streaming services add new subscribers, the key measure of their success is user retention. Roku notes that player unit sales in the second quarter of this year were “relatively flat year-on-year, following the demand spike in Q2 2020”.

As a result, Roku's shares fell in the immediate aftermath of publication. The service will be looking to take advantage of the early Covid-related sign-up surge and shifting ad spend to build off the results of this quarter over the second half of the year and beyond.

Roku Future of TV OTT

Content created with:

Roku

Roku pioneered streaming to the TV. We connect users to the streaming content they love, enable content publishers to build and monetise large audiences, and provide...

Find out more

More from Roku

View all

Trending

Industry insights

View all
Add your own content +