Roku featured in many news reports already in 2018. Numerous reports (such as this one from Parks Associates) document the streaming device’s huge popularity in the United States. But with so many other streaming devices and set-top boxes on the market, the question remains: Why the Roku?
According to Seeking Alpha’s Michael Kramer, this is a question we should all be asking. Kramer believes the market overvalues Roku, placing it in an extremely tenuous position as a company. In an interview on Cheddar TV, Kramer talks with hosts Kristen Scholer and Tim Stenovec about Roku’s recent 11% stock market slide.
“Is it time to sell?” Stenovec asks at the beginning of the segment. Kramer wastes no time responding that he believes Roku should never have been valued where it was in the first place. The answer for Kramer is simple: Roku is easily replaced by other devices. Given Roku currently makes no money from the streaming services on its platform, Kramer and others now question Roku’s continued market dominance. “Every TV is smart today with the ability to get apps,” Kramer explained. “How does Roku really make money going forward?”
Roku Ads Everywhere
The answer to that appears to be advertisements. In September, Roku released its own ad-supported video streaming app. Additionally, Roku sells advertising space on its devices for companies looking to capitalize on the huge customer base. It’s quite possible that many customers may be turned off by Roku’s focus on ads to generate revenue.
With much more competition on the market, 2018 may prove a make or break year for Roku.
Sam Cook is a full-time content strategist by day, a part-time freelance content writer since 2015. In another life, he was a high school English teacher for nearly a decade. Based in sunny New Orleans, he writes long-form educational content on technology, including Insurtech, Fintech, HRtech, and content streaming. He loves whittling down complex ideas within these areas that make decisions easier for buyers. When he’s not reading books with his son Miles and playing video games with the family, you can find him immersed in his growing collection of Euro-style board games.
They do make money other ways as well: 1) Processing subscriptions for SVOD channels and 2) they are entitled to show their own ads, and keep the revenue, for a percentage of ad time for AVOD channels.