Inside Content

05.10.21

Roku on the future of streaming

Jonathan

Jonathan Nickell Chief Operating Officer

In this episode I speak with Rob Homes, VP of Programming at Roku. He oversees the development and growth of The Roku Channel, a leading free ad supported service on the platform, as well as the overall programming strategy for America’s #1 TV streaming platform.

Firstly we discuss the different divisions with the Roku business - the hardware group and the platform unit. Rob explains that the hardware division is responsible for getting the Roku operating system deployed as broadly as possible, selling the boxes and sticks through a variety of different retailers globally. They are also increasingly partnering with more TV OEMS and consumers can now find the Roku operating system built into TV’s from over 10 different manufacturers domestically and internationally. The platform business unit offers a whole range of content and monetises it through advertising (AVOD) and also revenue shares from subscription sign ups. Within this unit there are two are different divisions, the Roku platform itself and the Roku channel.

The Roku platform itself is “kind of like your home screen”, and provides access to all your apps such as Netflix, Amazon and Youtube. This is where a partner can publish an app and make their experience available to consumers. From a partner perspective this area is self managed. They can create their apps, manage the technical back end, create customer engagement and leverage the tools including publishing and payment platform capabilities. “They're responsible not just for creating great content, but actually for doing all that technical back end customer acquisition, and they have to spend money to acquire customers. And then also that monetisation, whether it's through payments and subscription for SVOD, or advertising”.

The Roku channel, which launched just over four years, is a core element of the platform business. It’s a growing library of free ad supported content (AVOD) for consumers, as well as a la carte subscriptions that you can add on a one off basis. “Not everybody is able to make a compelling consumer experience in the streaming landscape to sort of manage the customer acquisition elements… and drive monetisation through subscription or advertising” Rob explains.

A highlight of the episode was discussing with Rob the future for TV consumption. “This vision of all TV will be streamed, we think that’s really a global secular trend”. He explains that one of the main reasons why people are moving towards streaming is the availability of free content. Rob discusses how the SVOD marketplace is booming with lots of great content but there is still the consumer psychology around subscribing to a paid SVOD platform versus watching something for free. So far the Roku channel has over 200 free ad supported linear channels, 40,000 episodes and also movies for free. “The Roku channel is the number six channel by reach in the streaming universe, you know, just after Disney+ and Hulu, and is the number one channel by far, you know, in reach against traditional AVOD services like like Pluto and TV”. Rob believes that this vast free content available on the platform makes it a really compelling proposition for consumers.

The role of super aggregators is a hot topic currently in the TV industry. Rob believes there will be standalone partners like Netflix and Disney+ that are important to have on the Roku platform to give consumers access to all of that content and choice. Whereas there will be smaller companies who are great at making content, who can partner with the Roku channel and benefit from great video delivery and user experience. “We’re seeing more and more people recognise that partnering with somebody like the Roku channel is actually a more efficient, better longer term business for them than this do it yourself model”.

Other topics discussed included content discovery, Roku’s algorithm and future trend predictions for the TV industry.

Here is a breakdown of the topics discussed in this episode:

[02:52] The Roku hardware business

[03:39] The different business units at Roku

[04:49] What is the difference between the Roku channel and Roku platform?

[07:03] What is Roku’s global roll out plan?

[11:22] The transition to streaming and power of free content

[12:44] Roku’s content acquisition strategy

[14:26] Roku’s acquisition of Quibi

[15:35] Are there plans to do other Roku originals?

[16:39] How do you aid consumer discovery of content on the Roku channel

[18:40] AI and ML for content recommendations on Roku channel

[21:21] Roku and its role as a video service aggregator

[24:15] What are the future trends for the TV industry and streaming?



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