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The world of technology and business continues to grow on a daily basis. This has caused many people to scramble to come up with new ways to connect with people. One way they have done this is through media and Connected TV (CTV) platforms.
CTV refers to any TV that can be connected to the internet. This allows the platform to access content beyond what cable providers can supply. Devices that use a television as a display are also referred to as CTV. Roku is one CTV platform that has generated a lot of revenue.
According to Statista, Roku reported a total of 51.2 million monthly active users by the fourth quarter of 2020. Making this figure the company’s highest monthly active users since being founded. This digital media player device provides its users with a single dashboard through which people can access a variety of original channels.
Between 2019 and 2020 the company earned roughly $388 million in total sales. A few years ago the company created a cutting-edge operating system (OS). Their OS is licensed to manufacture smart TVs using the CTV platform.
According to The Motley Fool, Roku OS is the top choice of smart TV manufacturers in the United States. They further add the company powers 38 percent of TVs purchased in the U.S. — 31 percent in Canada. As of 2020, the company is now the industry leader in CTV platforms.
Over the past 12 months, the company’s stock has risen nearly 300 percent. Most of this is attributed to the COVID-19 pandemic. However, it is suspected to stay at the top spot as they further invest in the future. This due to Roku deriving its revenue from two segments.
These two segments are:
- The platform segment — The Roku Channel; including digital advertising.
- The dongles and boxes like the Roku OS.
More than 29 percent of TV viewing occurs on streaming services. Roughly three percent of TV ad budgets are spent on streaming services. Roku devices host roughly 10, 000 channels on their platform. This is how the company makes a portion of its money.
For example, Disney+, Netflix, and Hulu all pay subscription fees to use the company’s platform. Roku really profits from the money it makes selling 30 percent of the ads that appear on the channels they stream.
The Motley Fool states that the company had around 17 billion streaming hours over the past year. This averages roughly 3.6 hours per active accounts each day. That is a lot of people watching TV and the advertisements that come with it.
Written by Sheena Robertson
The Motley Fool: Is Roku Stock a Buy?; Danny Vena
eMarketer: Roku Remains Top CTV Platform, Amazon Fire TV Takes Second Spot This Year; by Amy He
The Xcite Group: OTT & CTV Advertising
Statista: Number of monthly active users of Roku in the United States from 3rd quarter 2016 to 4th quarter 2020; by Julia Stoll
Featured and Top Image Courtesy of Paulo O’s Flickr Page – Creative Commons License
Inline Image Courtesy of Mike Mozart’s Flickr Page – Creative Commons License