Posts for 'Roku'

Last Thursday’s Q4 and 2020 earnings reports from The Trade Desk and Roku provide further evidence of connected TV advertising’s surge and also viewers’ significant adoption of streaming video. Because the two companies are heavily invested in connected TV advertising and provide lots of thoughtful insights on their earnings calls (transcripts here and here), their results and sentiments are valuable in gauging the state of the market. Together they provide a holistic picture of the market since The Trade Desk operates on the demand side and Roku on the supply side (primarily).

For some time, The Trade Desk has talked about the rising importance of CTV advertising on its overall business, which continued this quarter with the pandemic accelerating key trends. Founder and CEO Jeff Green said that advertisers’ CTV spending on the platform more than doubled in 2020 (total spend, including CTV, was $4.2 billion with Q4 revenue up 48% to $320 million). Green said “more than 1,000 brands spend at least $100,000 on CTV on our platform” and that “those brands spending more than $1 million on our platform in 2020 more than doubled from a year ago.”

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Welcome to the 549th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

On this week’s podcast, Colin and I dig into Roku’s strong Q4 and full year 2020 results which were reported yesterday. As has been the case for the past several years, “platform” revenue, which includes Roku’s advertising business, led the way. Platform revenue reached  $471.2 million in the quarter, up 81% year-over-year. The Roku Channel was another bright spot for the company in Q4, with 175 ad-supported virtual linear channels now included.

We discuss these and other topics, including whether Roku’s interest in original content could cause conflicts with existing content partners.

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Happy New Year and welcome to a new year of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.  

Roku continues to grow, announcing over 50 million active accounts at the end of 2020. On this week’s podcast Colin and I dig into the data that Roku revealed.

The explosion of premium content for streaming no doubt is helping Roku’s account growth and viewership. A recent entrant is Discovery+ and Colin shares his initial review of the service, including a few surprising limitations he found.

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Roku announced preliminary Q4 ’20 results this morning, including that it had 51.2 million active accounts as of Dec. 31st. While breaking the 50 million level is a symbolic milestone, more important, it’s evidence of Roku’s ongoing momentum. Roku increased active accounts by 14.3 million or over 38%, in 2020, up from 36.9 million active accounts at the end of 2019. Roku’s active accounts are up more than 5x in the past 5 years when it reported 9 million active accounts.

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HBO Max is live on Roku devices, a day after Roku and WarnerMedia came to terms on an agreement. The HBO Max app can be downloaded from the Roku channel store and users can subscribe to HBO Max, which costs $15 per month. Roku users already subscribing to HBO will be automatically upgraded to HBO Max and can use their existing login information.

The Roku-WarnerMedia deal comes after a months-long stalemate between the companies and while terms were not disclosed, it makes lots of sense for both. For HBO Max, Roku’s estimated 46 million active users were a huge hole in its addressable audience. Missing Roku’s user base would have meant that promotions like “Wonder Woman 1984” coming on Christmas Day to HBO Max (and theaters) would have been under-optimized.

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Connected TVs are pervasive in American homes and the pandemic has further accelerated their use. As linear TV viewing has declined, traditional TV advertisers have been shifting their spending to AVOD services, where long-form content is largely viewed on CTVs. Top of the funnel linear TV advertisers, driven by reach and frequency goals, will continue to be drawn by CTV’s and OTT’s expanding audience, especially as major TV networks move more of their premium programming online, in turn growing ad inventory.

In the long term, equally exciting for CTV and OTT is appealing to bottom of the funnel, or performance-oriented, advertisers, which have focused on digital opportunities like search, social and display. These advertisers are ROI-driven and are constantly optimizing for desired actions and outcomes like clicks, follows, buys, etc. Because CTV enables digitally-delivered TV ads with rich viewer data, performance advertisers can measure and adjust their CTV campaigns as they always have in digital.

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I’m pleased to present the 533rd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.  

Are AVOD and SVOD services in competition with each other for time and attention, or is there more of a continuum between them? For now at least, with viewership of both exploding, it seems like more of a continuum according to data Colin shares this week.

However, AVOD/SVOD viewership is coming at the expense of linear TV/pay-TV. This was substantiated again this week by Roku and The Harris Poll’s Consumer Holiday Shopping Report, which found a 19% YOY increase in streaming and a 13% YOY decline in pay-TV viewing. We discuss the details.

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People who stream video to their connected TVs say they plan to spend hundreds of dollars more per person this holiday season vs. those that don’t stream, according to the new Consumer Holiday Shopping Report from Roku and The Harris Poll which surveyed approximately 2,000 American adults.

Streamers plan to spend $921 compared with non-streamers who say they plan to spend $673. Overall, 1 in 4 respondents said they plan to spend more this holiday season and 47% plan to spend the same.

79% of streamers said they will do most of their holiday shopping online vs. 55% of non-streamers saying they’ll do so. The primary benefits of online shopping were free/cheap shipping (55%), fast shipping (47%) and tangible discounts and coupons (42%).

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Conviva released detailed streaming viewership data late last week for Q2 ’20, finding that Samsung is the clear leader in smart TV viewing time while Roku leads in connected TV devices. Globally, CTV devices accounted for 48% of viewing time, with Roku holding a dominant 49% share of CTV time (followed by Fire TV at 29%, Apple TV at 8.7% and Chromecast at 7.3%).

Smart TVs accounted for 15% of streaming viewing time, with Samsung holding a 49% share (followed by LG at 23% and Vizio at 11%). Rounding out the share of streaming viewing time, gaming consoles accounted for 11%, desktop and mobile each at 10% and tablets at 5%.

CTV devices have an even higher share of streaming viewing time in North America (56%) compared to smart TVs (14%).

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I’m pleased to present the 517th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. As always, we hope our listeners are staying well.

This week Colin and I discuss how new “virtual linear” channels will translate into more viewer engagement and advertising in connected TV. We start the discussion reviewing new data from Innovid and Pixalate showing healthy gains in both CTV ad impressions and programmatic spending.

Adding to the momentum will be virtual channels, which are essentially on-demand playlists of themed programming. Many CTV platforms are adding these free, ad-supported channels. Colin points out a new partnership between Endemol Shine and Vizio for four unscripted virtual channels. Roku was also in the news this week, launching 40 virtual channels with various programming partners. Virtual channels are also a key feature for Peacock. Colin and I expect the trend to gain momentum. 

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Roku is highlighting its ability to support “agile investment plans” by advertisers as it rolls out Upfront presentations to attract more ad spending on its platform. Roku is focusing on delivering advertisers enhanced agility, control and value as they navigate huge market uncertainty.

Dan Robbins, Roku’s VP of Ad Marketing and Partner Solutions, told me in an interview that the shift to streaming, acceleration in cord-cutting and the pandemic’s suspension of live sports and stay-at-home guidelines have led to “each advertiser facing a different reality.” In particular, Dan said more agility is the “number one request” Roku is getting from advertisers. Roku’s goal is to help align advertisers’ spending with actual media consumption. He noted that half of 18-34 year-olds’ consumption is now streaming, requiring different strategies by advertisers targeting this age group.

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I’m pleased to present the 516th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. As always, we hope our listeners are staying well.

After much anticipation HBO Max has launched and we share our initial observations on the app and content. Colin is especially impressed with the recommendation feature, which reportedly mixes algorithms and human curation. Even with its massive content library, HBO Max at $15 per month is at the high end of the market which should slightly limit its appeal.

A far bigger limiter is that neither Roku nor Amazon Fire TV are supporting HBO Max. Colin and I dig into what’s behind the conflict. Colin believes all the companies are seeking control over the user experience and the accompanying revenue and usage insights. In particular Amazon has around 5 million HBO Now subscribers through its Channels program that it is reluctant to see transition to HBO Max directly.

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Roku has launched OneView Ad Platform, a demand side platform (DSP), enabling ad buyers with a set of self-serve tools to create and manage campaigns across screens and ad formats. The move positions Roku to further increase the value of viewing data from its 40 million active accounts to help ad buyers allocate their TV, OTT and digital spending more effectively. As Dan Robbins, VP of Ad Marketing and Partner Solutions told me in a briefing “OneView Ad Platform is informed by TV but built to be omnichannel.” Launch partners include Drizly, Experian, Intuit TurboTax, Lexus and others.

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Next up in our series of interviews with industry thought-leaders sharing their thoughts and key data points on the impact of the coronavirus is Roku's VP of Ad Sales and Strategy Alison Levin. Roku has benefitted from the stay-at-home guidelines which have driven a surge of streaming viewing. In the interview Alison discusses the performance of AVOD vs. SVOD on Roku, why "OTT is the movie theater for most households," the role of free premium content promotions, how advertisers like Chipotle are shifting their media plans and why the pandemic is an inflection point for connected TVs, plus lots more. Read on for the full interview.

VideoNuze: Roku recently announced estimated streaming hours in Q1 ’20 were up to 13.2 billion. How do streaming hour growth rates compare for AVOD vs. SVOD and pay-TV services among Roku’s active users?

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Roku shared upbeat estimates on its Q1 ’20 active accounts, streaming hours and profitability yesterday, ahead of its May 7th earnings release. Roku said active accounts were approximately 39.8 million at the end of the quarter, up almost 3 million during the 3 months. That’s 49% higher than the 2 million active accounts it added in Q1 ’19. Roku has nearly doubled its active account base in the past 2 years; back on March 31, 2018 it was 20.8 million.

Streaming hours in Q1 ’20 also surged, to 13.2 billion, up 49% from 8.1 billion in Q1 ’19 and more than double the 5.1 billion hours from Q1 ’18. The increase in streaming hours is noteworthy because Roku said that in Q1 it finished rolling out its “Are you still watching?” feature which prompts the viewer after 4 hours of viewing and will terminate the session if there’s inactivity. The feature would suppress growth in streaming hours because sessions when people have fallen asleep or left the room would not play on indefinitely. The other impact is that for free, ad-supported services being watched on Roku and for Roku itself, ad inventory and monetization would be suppressed.

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As stay at home guidelines remain in place, it seems like more and more free TV and video are being made available, spanning the short and long ends of the tail (meaning super-premium through user-generated) - and everything in between. Not only does this create more choices for viewers, which will be welcomed, it also means more competition for subscription video services which were already vulnerable to belt-tightening. And for free TV/video that is ad-supported, it means more inventory and choices for advertisers.

Here’s what’s caught my eye just in the past week:

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I’m pleased to present the 501st edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

This week we discuss Roku’s Q4 and full year 2019 results, which were reported late Thursday. Roku now has nearly 37 million active accounts, up almost 10 million in 2019. More important, Roku continues to demonstrate strong capability in monetizing its viewers, with ARPU up $5.19 to $23.14. Looking back over the past few years, Roku’s ability to pivot its business from being player-based to advertising and licensing-based is very impressive, all the more so because it has pulled it off under the long shadow of CTV competition from Amazon, Google and Apple.

Putting Roku’s growth in perspective though, Colin and I also spend a few minutes reviewing Nielsen’s latest Total Audience report, which showed that overall, streaming still accounts for just 19% of total TV usage. As Colin notes, it’s far higher for younger age groups and cord-cutters. Nonetheless, it’s hard not to conclude that it is still relatively early days for both ad-supported and subscription OTT.

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(Note: I own a small number of Roku shares)

I’m pleased to present the 495th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

In today’s podcast, our final one for 2019, Colin and I share our top 10 video stories of the year. Whether you agree or disagree with our top 10 (or the ordering), no doubt we can all agree it’s been quite an eventful year for the industry. But as busy as 2019 has been, 2020 is setting up to be a year of even more innovation and change.

As always, Colin and I have had a ton of fun discussing all of the industry’s happenings each week, and we hope you enjoyed following along throughout the year.

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