I’m trying to wrap my head around how ROKU monetizes their user base.
ROKU is a content distribution platform. To get your content on ROKU the content publisher must enter into an agreement with Roku.
The agreement depends on the several factors. Some of those include:
-How your content is monetized(transactional, subscription, ad supported).
-The estimated number of customers who will sign up for your service through the ROKU platform
-The clout you have (Ie Netflix and YouTube)
-Prior deals in place (how long ago you first reached a deal)
-A multitude of services you sign up for that ROKU provides(ad services, promotions, data services, etc)
-ROKU channel including ADs for ROKU licensed content, AD sales for other content providers within Roku Channel, and premium subscriptions within ROKU channel(HBO, Showtime, etc)
That’s the basic formula. That gets cooked up and they reach a deal and that gets billed and then accounted for via 606. There would be other things like ads and ad services that would be billed as they occur in some cases. Or companies can buy ads in blocks etc. There’s a lot that goes into it all.
Also, typically performance obligations are built in and when Roku reaches those points certain things trigger. Like say they estimate 500,000 sign ups in first two years. And Roku meets that in 1 year instead. That will trigger some effect.
Netflix, Prime, YouTube, Hulu all pay ROKU something although for those big 4 OGs the monetization of them is minimal according to the SEC filings. Maybe more for Hulu. Also companies pay to place their branded buttons on remotes and every time you are on the home screen you see a promotion off to the side. It is unavoidable to use your Roku and not be monetized in some way although certain viewing habits and sign up habits will be monetized (much) more than others. Someone who doesn’t have Netflix or Hulu and binge Watches ad supported content (there are thousands of channels for this) is monetized to a greater degree.
On average a user account generates $23.14 (trailing twelve month) up 30% yoy.
Darth