Roku Aims to Soar in Streaming
Roku (NASDAQ: ROKU) started the new year with a new deal. The company offers hardware and digital media players as well as access to streaming media content from various services. Roku bought the exclusive global distribution rights to the portfolio of Quibi, a mobile-only streaming service that launched in early 2020 and is fronted by Jeffery Katzenberg. So what does this mean for Roku?
The acquisition will give Roku most of the Quibi library and some daily news shows while unlocking talents like Idris Elba, Kevin Hart, Liam Hemsworth, Anna Kendrick, Nicole Richie, Chrissy Teigen, and Lena Waithe. The lineup includes titles like Most Dangerous Game, Dummy, and Murder House Flip. This puts Roku in a position it’s never been in, with content that it can exclusively share with Roku users. Roku shares rose 5% to around $398 per share on the news. Rob Holmes, Roku’s vice president of programming, mentioned in a recent interview:
We preserved all of what was in the existing agreements. We’re excited about that. It’s great, high-quality, top talent, and high-quality content.
Katzenberg had this to say about the deal:
The most creative and imaginative minds in Hollywood created groundbreaking content for Quibi that exceeded our expectations. We are thrilled that these stories, from the surreal to the sublime, have found a new home on The Roku Channel.
These shows will be housed on the Roku Channel and will be available for free later this year. They will have advertising similar to when they were on Quibi’s $5-a-month service. The Roku Channel has become a hub for free and premium content. By the fourth quarter of 2020, it counted an estimated 61.8 million people as viewers — double the reach of the company at the end of 2019.
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The first Roku model was developed in collaboration with Netflix (NASDAQ: NFLX) and introduced in 2008. Roku has come a long way since those days, and it’s preparing for a future in which it holds market share. The addition of Quibi content provides the company a sort of a test phase for how it can create content. Almost all streaming services have their own exclusive and original content; it’s what sets them apart and could even be the deciding factor as to why some consumers pick a monthly subscription to Netflix instead of Hulu.
Roku is focusing on acquiring more content for itself and upping its original content. This would keep users hooked and give them a reason not to leave Roku’s platform. In addition to its other streaming services and its own original content, Roku comes with a variety of live channels and free movies. Andrew Hare, a senior vice president of research at the media firm Magid, had this to say about Roku:
Anything Roku can do to continue the growth story on ad-based video on demand and assert their strength in that space will be a consideration. It’s clear Roku is aggressively pursuing content deals and licensing for growth. It’s not necessarily about the Quibi content, more likely content in general.
Back in September, Roku made a distribution deal with Peacock, NBCUniversal’s new streaming service, and NBC television content was also added to the Roku Channel. I believe Roku is fighting to become the next Netflix, even though it has already set itself apart from Netflix by providing users with streaming devices and a platform that offers a variety of content in one place.
Until next time,