Throughout Roku’s history there have been eight generations of Roku devices, each coming with small but significant upgrades from the last. With original models only capable of streaming in 720p, Roku has made strides resulting in the latest models streaming in crisp 4K. These improvements, along with being the first on the market, have led to dominance in the connected TV realm. In a survey of over 1,000 people, Roku maintained a hefty lead over its closest competitors in households with a connected TV. In the survey, 43% of all people with connected TVs had a Roku. In comparison to the 35% from their main competitor, Amazon’s Fire TV, and only 27% from Apple TV, Roku is by far the biggest player. Considering the growth of the connected TV market, and the fact that in the face of this dominance, Roku’s users are still 95% based in the US, the potential for international growth is expansive.
In addition to the lead in users, Roku also leads in customer satisfaction with the product. The same survey showed that of its impressive user base, Roku was rated a 6 out of 10 or above with 54% of respondents, which again trumped Fire TV at 53% and Apple TV at 38%. This, however, only shows off part of the picture.
Since the onset of the pandemic, Roku’s usage has drastically risen, with the company reporting a 65% increase in usage compared to a year ago. This track also directly led to a 50% increase in Roku’s monetized video ad impressions over that same year. This leads to a larger discussion on Roku’s revenue as a whole.
On a large scale, Roku’s revenues have been on a consistent upward trend in the last five years. Compared to the $319.86 million Roku earned in 2015, the company has skyrocketed since, taking in $1.13 billion in 2019. This trend seems likely to continue when looking at 2020, where revenues reached $677 million in the first half of the year, a markedly higher point than the $457 million during the same period of time in 2019. These numbers are all indicative of the company’s positive growth and the growth of streaming as a whole, especially when considering how Roku earns its revenue.
While a significant portion of Roku’s revenue every year comes from the actual selling of their devices, the pricing model and costs for putting a streaming channel on Roku seems to be the area where growth is most likely. To house any given streaming service on a Roku device - where, as previously stated, there are over 10,000 - a portion of that streaming service’s revenue must go to Roku. The standard asking price from Roku in exchange for housing the service is 20% of subscription fees and 30% of ad inventory on partnered channels. That, when combined with the continued growth of both the number of streaming services available and the growth of streaming, leads to optimistic outlooks on Roku moving forward into the future.
Roku’s market control of connected TV devices, positive trending revenues, successful revenue models, and robust expectations from leading analysts all seem to point in one direction. Roku is poised to continue building a larger and more influential place as the liaison between large media companies and consumers.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.