Roku’s Active Live Streaming Video Membership Grew Significantly Post-Quibi Shutdown

Roku has released fourth quarter and fiscal year 2020 results. The pioneer in CTV organized a conference call to announce their Q4 financial results for the period ending 31 December 2020. The call was attended by Anthony Wood, Roku’s founder and CEO; Steve Louden, our CFO; and Scott Rosenberg, senior vice president, general manager of CTV Platform business.

As the leading streaming to TV platform in the U.S., Roku has played an important role in the existing US-centric TV ecosystem. It has been on top of its CTV game, connecting diverse groups of viewers, content owners, and advertisers at “scale in a virtuous cycle that creates value for all participants.

Here are the key takeaways from Roku’s conference call Q4 2020.

  • Roku’s active membership grew to 51.2 million, adding 14 million accounts in 2020 alone.
  • During the COVID-19 period, Roku users streamed 55% more hours than pre-COVID-19 days.
  • Monetized ad impression were reported to be above 100% in the Q4 of 2020.
  • Roku recorded an active account base growth by over 5 million, resulting in a record 14.3 million incremental active accounts for the year.
  • Roku’s current Live Streaming active account base is almost twice the size of video subscribers belonging to the largest US-based cable company.
  • Roku Channel acquired the digital assets of Quibi, which closed in October 2020. The Roku Channel is growing its streaming hours at 2X rate compared to the platform rate.

Ahead of the announcement, David Wiesenfeld, Chief Strategist at Tru Optik, a TransUnion Company spoke to us of what he expected.

Here are some of David’s initial thoughts:

  • Roku is well-positioned for robust growth in 2021. Roku is poised to continue to benefit from the rapid shift to streaming TV and will likely aim to further leverage its position as the most popular streaming platform to strengthen its competitive position.
  • Roku is best known for its streaming devices, but over two thirds of its revenue comes from advertising. In return for carriage on Roku devices, ad-supported apps allocate around 30% of their inventory to Roku. That means Roku will likely continue to ride the wave of migration from linear TV to OTT in 2021 even though 80% of households already have streaming devices.
  • Roku has successfully grown viewership of The Roku Channel – it’s owned & operated app for which it retains 100% of ad revenue. Roku’s formula here appears to be to leverage its distribution strength to bring more first-rate content from its publisher-clients to The Roku Channel more quickly.
  • As its ad network grows, Roku will likely explore ways to enhance yields by segmenting its inventory. Roku has long used its ACR capability (limited to smart TV’s with the Roku OS) to charge a premium for “incremental” OTT impressions – those that reach users who watch little to no linear TV. Roku Preferred is a newer offering that guarantees placement on the most-watched Roku apps for a 30% – 50% CPM premium.
Future Outlook for 2021

The CFO of the company acknowledged that Roku is planning to go soft on the Q1 2021 results, but expect a better quarter compared to its performance in Q1 2020 when like most of the businesses, Roku too was forced to take responsive action in the wake of COVID-19 pandemic.

He said, “We anticipate the growth rate in operating expenses for 2021 to be more in line with 2019 year-over-year organic opex growth levels versus 2020 when we took precautionary steps at the outset of the pandemic to manage down the rate of expense growth.”

CEO of Roku said that  the company added about 100 million linear channels in 2020 to The Roku Channel. We have content from Disney, NBC, A&E, Discovery, and more.

You can read the full transcript of Roku’s Q4 2020 Conference call here.


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