We Interrupt This Program

Image Credit: Warner Bros.

I’m making a traveling shortlist for 2022.

It may include visiting Qatar to watch the FIFA World Cup.

There’s a chance I’ll opt for Airbnb ($ABNB) stays over hotels, except in Qatar.

One commonality between the two lodging experiences might be Roku ($ROKU).

I’ve never owned any hardware iteration of a Roku.

I’m more of a Google ($GOOGL) Chromecast fan.

But I’ve used plenty of Rokus outside of my home.

Many times, I felt unimpressed with the style of its remote and its OS interface.

I never felt like converting to a Roku since my TV operating system naturally runs on Android TV.

But it’s been tough to dismiss Roku these past few years as I’ve watched its stock soar.

Beth Kindig wrote the following on Forbes:

An investment in Roku does not force investors to choose which streaming service will be #1, as Roku benefits from the success of a broad range of AVOD publishers. Advertisers are planning out strategies to reach cord-cutters effectively, and Roku stands to be a main beneficiary. Roku is positioned to capitalize on AVOD market growth and has now launched an omnichannel marketing platform to extend first-party data for mobile and desktop targeting. This last part is key because Roku can now capitalize not only the $10 billion currently spent on CTV ads and the soon-to-migrate $70 billion from Pay TV — but Roku will offer additional targeting on mobile and desktop with first-party data — opening up the entire $200 billion+ ad market.

For Q3, Roku reported 73% year-over-year revenue to $452 million. Platform revenue increased 78% YoY, and gross profit was up 81% YoY. Link

All this time, I underestimated Roku because I categorized it as just another HDMI port filler or the default operating system of a brand of TV I’d shun away from at a Best Buy ($BBY), but the company’s numbers are impressive:

Accordingly, based on eMarketer’s research, Roku currently leads the U.S. market with an estimated 47% of CTV viewers using a Roku device in 2020. The research firm also believes this trend will continue, and that by 2022, Roku will control more than half of the market. By comparison, Amazon Fire TV currently takes second place with a roughly 36% share of the CTV viewing market.

Reinforcing this trend, Roku took the top spot in U.S. and Canadian smart TV sales in 2020–38% of smart TVs sold in the U.S. and 31% of smart TVs sold in Canada included the Roku OS. This marks growth from 2019 when Roku TVs accounted for nearly one-in-three smart TVs sold in the U.S., according to various sources. This trend definitely gives Roku an advantage, as it should help the company engage new users and protect its market-leading position. Link

I have no regrets about paying over $1,000 for my last TV, a Sony ($SNE) X950H series.

And that includes opening up a Walmart ($WMT) credit card to get a discount.

But Roku is getting the job done for the masses.

And the masses are a lot of people.

Who knows, someone might finally watch a Quibi show!

Roku will acquire more than 75 shows and documentaries created by Quibi and Hollywood-based studios, the company said in a statement. Quibi’s content includes shows starring actors like Anna Kendrick and Liam Hemsworth, and more than a dozen new shows that hadn’t even debuted on Quibi.

“Today’s [last month’s] announcement marks a rare opportunity to acquire compelling new original programming that features some of the biggest names in entertainment,” Roku’s vice president of programming, Rob Holmes, said in a statement. Link

But it isn’t very likely.

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