The seismic shift to streaming - Roku

Great article on today on Roku. One of the lines in the article really stuck out:

“According to a January report from market researcher Parks Associates, 43% of people still paying for traditional TV plan to switch to streaming in the coming year.”

That is an incredible number! Almost half of people with cable or satellite will cut this year! Cord cutting recently was only happening at a pace of 5-7 million a year. Megatrends speak to me. Long Roku, TTD, Fubo, and Magnite.

Full article: Is It Too Late to Get In on This Millionaire-Maker Stock? | The Motley Fool…


If my math is correct, there are 74M pay TV subs in the USA.
If 43% drop and go to streaming, that is ~32M.
$ROKU has 49% market share based on my digging so they gain 15-16M users in the next 12 months?
I guess that seems plausible but from the statistica numbers it seems they are only predicting 4-5% drop off in pay TV subs in the next 12 months.

I’ve always been basing my ROKU target on 250M global subs by 2026, roughly 38% CAGR. If they can get to there and generate ARPU of $75 (just over $6/month), that puts them at near $20B in revenue. Put a multiple on sales and that will give you some sort of target; I would guess 15x so $300B MC, 6x from here in 5 years.

BTW, I’m long $ROKU. Thanks for the article share.


A decent percentage may also be unplanned as it was for me. When I moved, the area only had Frontier as an internet and cable provider - they had bought FIOS from Verizon in this area of Florida. But they told me they no longer installed cable, I could only by internet from them and the would have to stream. I went with YouTubeTV and 4 Roku devices.

Advertising is interesting and I can’t tell if Roku or YouTube is presenting ads (when they are not national adds by the network I am watching). I do know that YouTubeTV give me 30 seconds of “zen” on occasion (snow, streams, etc), which is nice. Also, there will be times were it says “ESPN Commercial break” and just plays music over the text. I don’t know why Roku and YouTube aren’t shoving ads at me during those breaks. Maybe a contractual thing where they would have to pay ESPN.

I know Roku gets cuts of subscriptions, but seems like lots more room to push adds.


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