- There are ads you may not notice, like one big one on Roku’s…I don’t know what to call it…“home screen?”
OK, if I scroll to show the channels/services list/matrix I’ve put together there’s an ad. I’ve seen 2 different ones so far. One was a Roku ad, so they’re not making any money off themselves. The other was for an Acorn TV trial. Not making much money off of that.
Like I said, there are ad-supported channels, including at least one that is Roku’s own. But, that’s only for old content (like some 1940’s movie I wanted to re-watch), not recent content.
What I do like about the Roku box is its Search feature, which lets me search for a movie across all services, with prices. No ads while using that feature. So far.
I would imagine that services pay Roku a sales commission if a user signs up for the service via their Roku. I would highly doubt that would be an ongoing fee, though. This year-old article claims Apple had been charging Netflix 15% of any sale done through AppleTV (https://www.nytimes.com/2019/03/22/multimedia/netflix-apple-… ). Netflix worked around that by having the sign-up take you “an external website.”
Roku itself pays referral fees to web sites that send people to roku.com to sign-up. https://www.roku.com/about/affiliate But, that page must be old because it says Roku has sold only a million players.
My take here is that with 40 million users, Roku has won. They’re too big a player to be ignored, and my theory is their user base will continue to grow just because of this network effect.
Well, that same article claims Apple has 1.4 Billion devices. Another article out a couple of days ago claims Hulu itself has 32 million subscribers (https://www.theverge.com/2020/5/21/21262291/apple-tv-plus-mo… ) Disney+ at 29 million (https://www.fool.com/investing/2020/02/06/disney-netflix-and… )So, 40 million accounts (how many MAUs, btw?) doesn’t seem so huge in context.
And, I don’t see how a “network effect” brings in any new users. OK, maybe if someone wants a second TV and they have Roku they’ll buy a second one (same account, though), but it’s not like I run around telling all my friends how great Roku is. At least not the way Apple or Tesla customers do.
And from a user perspective, I don’t see anything sticky with regards to Roku except the Search feature. I can, and do, watch my services on things other than my one Roku box.
From a TV set maker perspective, I’ve personally seen LG cut back on their software, which is based on WebOS (my OLED dates back to 2014), so I could see where TV makers struggle to develop software that users will love, but it’s not like many people base their TV decision on how easy it is to choose Netflix versus Amazon, just that both are available. This is going to be tough - paying Roku for the streaming software/hardware design may be easier for TV makers, but it means they don’t get any of that great revenue you say Roku gets.
Anyway, thanks for the Roku discussion. I’m considering selling my shares next week.