Streaming platform Roku (ROKU) is bringing major changes to its free The Roku Channel, adding 30 new channels to the offering, bringing the total to more than 100. It’s an important step from Roku, as The Roku Channel offers an avenue for advertising revenue for the streaming giant.
As Roku has grown as a platform its advertising revenue, which it generates through The Roku Channel as well as ads across its various menus, has eclipsed the revenue generated through the sale of actual streaming devices.
The Roku Channel offers everything from live news and sports to movies and TV shows and kids’ content. It also supports premium content from services users subscribe to. Roku also earns a cut of subscriptions user sign-ups for through the company’s platform.
In addition to the new content, Roku is adding a new channel guide to The Roku Channel to help users navigate its various offerings. It’s similar to the kind of layout provided by your average cable or satellite provider, with numbers for each channel and descriptions of what’s on.
According to the company, 36 million users accessed The Roku Channel in Q1 2020, making it a potent vehicle for the streaming giant’s advertising ambitions.
But as it becomes a larger player in the content distribution race, Roku may be seen as a threat by the likes of Netflix (NFLX), Hulu, Amazon (AMZN), and Disney (DIS), all of which make their services available on Roku’s platform.
It would be a detriment to those services to take their offerings off of Roku’s platform, since so many people already use Roku devices, with the company reporting 40 million active user accounts as of Q1. But the relationships between the firms could sour if Roku begins to pose a risk to any of the streaming services’ user numbers.
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