They probably couldn’t get Roku for free but probably very cheap if they decide to go that route. It’s extremely expensive and resource consuming to build, develop, and support that ecosystem. And then they have to market and obtain content to engage. Even if you build the best operating system ever and no one uses it and instead watches on their Roku or Fire stick, what have you accomplished other than spend a lot money? For the consumer as you watch a device that device becomes very personalized managing all your subscription and logins and payments and apps and content.
Choosing to license the software spreads all those costs among all the licensees and Roku does all of that for them. Making it very cost effective for HiSense or Samsung or whoever. As we can see many brands are going the license route, particularly the value brands that don’t have the margins to absorb that cost. And those value brands are capturing market share by offering competitive TV performance combined with a Smart function that’s already well established and has a significant following and content library.
We can also see that many TVs manufacturers, particularly higher end (Samsung and LG) are going with their own solution. The engagement on those systems (viewing hours) pales. Will they continue to invest in the platform for minimal return? Starting out miles behind and never progressing in engagement.
I think 12x shared this somewhere else. This is Q1 2019 US TV shipments compared to Q1 2018. Notice how TCL (Roku) completely overtakes Samsung in shipments. Now I’m sure this has a lot to do with the tariff threats, but demand is an issue as well to be sure. And demand has a lot to do with TCL offering an excellent TV at an excellent price (Samsung still rules supreme in revenue in the article). Does Roku have at least some component to the demand? What if there’s a similar dynamic as these Roku TVs hit the international market? TCL’s competitors will be taking notice.
https://hdguru.com/ihs-tcl-holds-no-1-tv-market-share-for-no…
I have no idea if Samsung or LG or Vizio will ever abandon their own OS in favor of a licensed model. Any one of those would be a big deal. Sony uses AndroidTV OS, which apparently from reviews has serious stability issues that seem to be getting a little better on newer generations. Android share is tiny.
I get why someone skeptical of Roku wants to compare to Tivo. But Tivo is not a good comparison to me. Tivo had about a year maybe a year and a half of great growth and then failed. Roku has been around for a decade and is still accelerating. During that time Tivo lived competition free. They were it. Roku has thrived despite competition from the biggest names in tech, Amazon, Apple, Google, and those tv manufacturers. And that competition has been at it since the early days. Tivo had a technology. That recorded digital content for playback. Roku is a platform and an ecosystem, a hub for daily entertainment. A much more valuable enterprise.
BTW, interesting that Tivo still has about $700M in annual revenue.
This are my thoughts on your questions, crowdsourced from many other great posters.
Darth