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February 23, 2019
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Roku on track for $1 billion in revenue in 2019

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Roku plans to be a billion-dollar company in 2019, the company said on Thursday as part of its announcement of strong earnings. The company beat analyst estimates and reported strong growth in active users and streaming hours with earnings of $0.05 per share, compared with the $0.03 analysts had estimated, and revenues of $276 million, compared with the expected $262 million.

Roku also reported 40 percent year-over-year active user growth, with 27.1 million active users by year-end, and a 69 percent year-over-year increase in streaming hours, which reached 7.3 billion.

The company said it plans this year to invest in international expansion, its ad-supported service The Roku Channel, advertising, and its Roku TV platform.

While cord cutting is driving some of Roku’s growth, only around half of Roku’s customers fit this description, CEO Anthony Wood pointed out. The other half are more like “cord shavers” – those who are still pay TV subscribers, but are shifting more of their TV viewing to streaming services.

Roku’s ability to also attract pay TV customers combined with the fact that 1 in four smart TVs sold in the U.S. now runs its software, is helping the company’s market share grow.

Roku estimates that 1 in 5 U.S. TV households now uses the Roku platform for at least a portion of their TV viewing. In the year ahead, Roku aims to better capitalize on its traction by increasing the monetization per user and scaling the number of households using Roku.

In addition, the company sees a big opportunity in international.

“International is one of the top four areas we’re investing in,” Wood noted.

“Roku has more than 27 million active accounts globally today. Most of those are in the United States. But we believe many of the assets we built for the U.S. market will help us expand into other markets. And clearly streaming is a global opportunity with one billion households worldwide,” he said.

The company begin investing more substantially in international in 2018, and has now reached 20 countries. It has added more local content and is expanding its relationships with international resellers, said Wood. “We think you’ll start to see the results of this increased investment bearing fruit in 2020,” he added.

Roku also has high hopes for The Roku Channel.

The channel is now one of the top five most popular on the platform and grew from around 1,000 free movies and TV episodes in 2017 to now around 10,000. Last year, it added more streaming partners like ABC, Cheddar and People TV and even expanded into subscriptions, with add-ons like Showtime, Starz, and Epix.

The company believes the channel will continue to become a main destination on its platform, which helps Roku to monetize through advertising and its cut of subscription revenue, when customer opt to add on extra packages. But today the channel is still lacking many of the major subscription services, compared with the more robust lineup offered by Amazon Channels. For example, HBO is not offered through The Roku Channel today, nor is CBS All Access.

However, the company believes its financial performance will improve this year – reaching the billion in revenue mark, with platform revenues accounting for two-thirds of that. This, in part, will be due to growing its installed base and extracting more revenue from each customer, including through The Roku Channel.

It’s worth noting that Roku recently made it possible to stream from The Roku Channel directly on mobile devices, which will likely play a role here.

Roku has been growing at a rapid pace alongside the larger cord cutting and streaming TV trend.

In the past three years, it increased active accounts by 4 million, 6 million and then nearly 8 million, respectively, it said. And it quadrupled the size of its platform revenue from just over $100 million in 2016 to over $400 million in 2018. In the U.S., its active account base of 27+ million would make it equivalent to the No. 2 traditional pay TV provider.

In addition to international expansions in 2019 and investments in The Roku Channel, Roku aims to increase its Roku TV market share, and roll out new ad products in areas like marketplace, programmatic, and self-serve.

Roku’s investments in its platform led to 77 percent year-over-year growth to reach 151.4 million in revenue in Q4. But the player business is still growing too – 21 percent year-over-year to reach 124.3 million in revenue, Roku said.

However, a lot will changing in the streaming landscape this year, as new offerings from AT&T (WarnerMedia streaming service), Apple, Disney, Viacom (which just bought Pluto TV), and NBC hit the market.

But Roku believes it will weather these changes, too.

“I founded this company on the belief that all television was going to be streamed,” Wood told investors. “And it wasn’t that many years ago when there was no streaming, and then the only streaming was Netflix. It took a long time for the incumbents to embrace streaming. But they have. And that’s very gratifying to see every major media company in the world developing streaming strategies, which is great — it’s great for us, because we’re the leading streaming platform,” he said.

 

 

News Source = techcrunch.com

Pluto TV will expand its free service with paid subscriptions, says new owner Viacom

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Last month, Viacom picked up free streaming service Pluto TV for $340 million in cash. This week, the company spoke in more detail about its plans for Pluto TV – including its potential to for ad-supported streaming as well as the ability to market Viacom’s various subscription video properties directly to consumers, similar to how Amazon Channels works today.

At the time of the acquisition, Pluto TV offered over 100 channels of free content from 130 partners, and reached 12 million monthly users – many of whom are younger, and never intend to subscribe to traditional pay TV, like cable or satellite.

While Pluto TV built its brand on offering access “free TV,” Viacom sees the service not only as a way to grow an ad-supported video business, but also a way to upsell those free customers to paid subscription video products.

Viacom isn’t the only brand to have realized in recent months that a good number of consumers are uninterested in paying for TV and movies, when there are so many free alternatives for entertainment available on today’s web – including most notably, YouTube’s massive ad-supported video network, and to a lesser extent, the video offerings from places like Facebook Watch, and even those from social apps like Instagram and Snapchat.

That’s led many in the industry to launch their own, free and ad-supported video destinations. This includes Amazon’s recent debut of IMDb’s Freedive; Roku’s free TV and movie app known as The Roku Channel; Sling TV’s teaser package of free content for non-subscribers; and Walmart’s now over two-year old Vudu “Movies On Us;” among others. Plex also recently said it will venture into this area in 2019.

Viacom believes Pluto TV will give it a leg up in this growing ad-supported video market, explained Viacom CEO Robert Bakish, in a call with investors.

“We believe the majority of the Pluto TV audience is not watching pay-TV today. This segment already exists, so it makes sense for us – as Viacom – to take share,” he said. “Given the segmenting of the market, distributors need a free TV offering.”

The idea is that the free TV offered by Pluto TV will continue to attract consumers to the service. And Pluto TV will become more attractive on this front as Viacom adds its own content to the service – including all the programming it has been holding back from other subscription video-on-demand (SVOD) services over the years.

“Our strategic decision to curtail large-scale library licensing to the SVOD players over the last couple of years – it cost us some money in fiscal 2017 and 2018 – but it means that we have large volumes of content to bring to bear now once we close the Pluto transaction,” Bakish noted.

In particular, the content Viacom plans to bring to Pluto TV spans genres like “kids, African-American, reality and comedy,” the company said.

Pluto TV will also gain access to Viacom’s marketing capabilities to grow its audience and its infrastructure, allowing the service to expand globally.

Meanwhile, Pluto TV offers advertisers an attractive audience, as it’s capable of reaching younger viewers who are opting out of pay TV, Viacom believes. Half of Pluto’s users today are ages 18 to 34, and the majority watch the service’s content on their TV’s big screen, thanks to Pluto’s integrations with smart TVs like those from Samsung and Vizio.

“It will provide a rapidly growing source of billions of monthly advanced TV impressions in young and hard-to-reach demos in a premium and safe environment,” said Bakish.

By noting that Pluto TV content would be “safe,” Bakish is taking a pointed dig at YouTube, which has struggled to police its user-gen content in a way that made it safe for advertisers, which even resulted in a brand freeze over ads in 2017. This is still a big concern for YouTube, CEO Susan Wojcicki said this week a letter to the YouTube community.

Last year, YouTube saw “how the bad actions of a few individuals can negatively impact the entire creator ecosystem,” wrote Wojcicki. “And that’s why we put even more focus on responsible growth,” she added.

In addition to the poor taste in programming choices made by various creators, at times, YouTube and more recently Roku, have also had to weigh decisions about how much extremist content they want to host in the name of being an open platform. The risk that comes with that is a significant impact to their bottom line as advertisers flee, the companies have found.

Viacom noted that Pluto TV’s ad inventory is today undersold – today, the company’s sales team sells less than 50 percent of ad space. That leaves room for growth.

In addition to free streaming, Viacom plans to use Pluto TV to grow its paid subscriber base, as well.

Through Pluto TV, Viacom will offer customers the chance to add on paid subscriptions to their account, Bakish said – a strategy employed today by Amazon and Roku.

These add-ons will include those for Viacom’s subscription products like Noggin, aimed at parents of preschoolers; Comedy Central Now; and the company’s newest subscription, NickHits, the CEO said. (The latter targets older kids and recently arrived on Amazon Channels.)

Viacom said the Pluto TV deal would boost revenue in 2019, but will be “slightly dilutive” to earnings. Viacom experts the deal to close in March.

The company reported a mixed quarter, with revenue of $3.09 billion that fell short of Wall Street forecasts, an earnings per share at $1.12 which beat analyst expectations.

News Source = techcrunch.com

Free streaming service Tubi plans to invest $100M+ on content in 2019, expand internationally

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Free TV and movie streaming service Tubi is preparing to double down on content acquisitions this year, the company announced this morning. The service today offers over 12,000 movies and TV series, totalling 40,000 hours of content. All of this can be streamed for free as the content is paid for not via customer subscriptions, but rather by advertising. Now the company is preparing to invest over $100 million to expand its library this year, after hitting profitability in Q4 2018, and tackle new markets.

Founded in 2014, Tubi has benefitted from the trend towards cord cutting, as well as the increasing number of younger consumers who never opt to pay for cable or satellite TV in the first place – sometimes called the “cord nevers.”

The company claims that its viewership increased by over 4.3 times from December 2017 to December 2018, which allowed it to hit the profitability milestone. In the fourth quarter alone, it saw more revenue than in all of 2017 combined, it also noted. And it grew revenues by 180 percent-plus in 2018.

On the advertising front, the company says it ran campaigns from over 1,000 advertisers in 2018, including those from the majority of the top CPG and automotive companies.

However, several aspects of Tubi’s business aren’t being disclosed alongside today’s news – only the highlights. What the company won’t say is how many monthly active users it has, how many hours they watch, or how many ad impressions take place across its platform. These sorts of metrics are critical to measuring success in ad-supported video.

Along with its plans to grow its library, Tubi is preparing to expand outside the U.S. and Canada, with the first market launching this quarter.

To help fund its growth and content acquisitions, Tubi closed on $25 million in debt financing from Silicon Valley Bank in December.

These plans come at a time when Tubi’s business model has been seeing increased competition.

For example, Roku entered ad-supported programming with its own The Roku Channel launch in fall 2017, and said earlier this month it now has 27 million user accounts. Of course, Roku doesn’t break that down by how many use its platform for other services, versus those who specifically launch Roku’s own free content – but that is its ad-supported channel’s potential reach.

In addition to Roku, Tubi competes against Walmart’s ad-supported video on Vudu; Amazon-owned IMDb’s new service FreediveViacom’s latest acquisition, Pluto TV; Sinclair’s local broadcaster-focused service Stirr; and soon, Plex. Comcast will also launch a free streaming service for its pay TV customers in 2020.

Tubi, like many of these services, believes in its potential as consumers tire of being nickeled and dimed for video subscriptions.

“In 2018 we at Tubi saw tremendous growth as consumers, fatigued by SVOD subscriptions and services, sought alternative entertainment choices,” said Farhad Massoudi, CEO of Tubi, in a statement. “We will continue to use profits to make bigger bets on content, enhance the viewing experience, and continue to press ahead into new grounds in what is our core advantage: technology and data,” he added.

In reality, however, Tubi competes for attention among a growing streaming market, which includes those paid subscription video offerings. Today’s consumers are building out customized bundles that make sense for them – a little Netflix and HBO perhaps, fleshed out with some free content through services like Tubi, for example.

Tubi’s advantage, of course, is that it doesn’t have to spend the billions on content and originals that subscription video services like Netflix do to win users. Instead, it relies on titles that have mainstream appeal, but may not be winning any awards – like older movies, kids shows, B-flicks, horror films, and reality TV.

At the end of the day, however, Tubi won’t necessarily gain from people tiring of subscription video, but from the growing influx of cord cutters who are searching for older or niche content not included in subscription libraries -or who just want to watch a free movie.

 

News Source = techcrunch.com

Roku’s à la carte premium subscriptions arrive today, but without HBO

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Earlier this month, Roku announced it would soon begin selling subscriptions to premium video services directly from its own TV and movies hub, The Roku Channel. Today, those subscriptions are going live, allowing Roku users to sign up for channels like EPIX, Showtime, STARZ, and others, then stream them without needing to install the channel’s own app on their Roku device.

Instead, all the content from the add-ons will be found in The Roku Channel section itself, alongside the other free and ad-supported TV shows, movies, news, sports, and entertainment programming already offered. However, the premium channels will have their own area inside The Roku Channel, including a spot on the homepage, as well as their own dedicated tabs, the company earlier said.

In time, Roku hopes to leverage the data from users’ unique blend of subscriptions to better personalize its recommendations.

A number of companies today offer the ability to watch premium programming through add-ons subscriptions, but fewer allow you to do so à la carte – that is, most require you to subscribe to a core TV package first before adding on extras. Amazon’s Prime Video Channels is probably the best known of the à la carte providers, though Sling TV rolled out a selection of premium a la carte channels last year.

Roku doesn’t plan to offer its own “skinny bundle” base package of streaming TV content at this time, the company recently told TechCrunch.

“I think where we are today is really focused on these à la carte subscriptions,” said Roku’s vice president of Programming, Rob Holmes. “Ultimately, from a user standpoint, there’s a lot of value in being able to pick and choose exactly what you want to sign up for — without having to sign up for one of these base packages to start with. That’s how we think about it today.”

Once subscribed to one of Roku’s premium selections, customers will only be able to watch the content through The Roku Channel itself. In addition to the revenue split on these add-ons, this benefits Roku because it puts attractive premium content right next to Roku’s ad-supported fare of some 10,000+ free movies and TV episodes. When customers are in search of something to watch next, it will be easy for them to just browse within the section they’re already in.

Plus, Roku says add-ons subscribers won’t even be able to use the premium networks’ own apps at launch, which keeps them further isolated in Roku’s own universe.

In order for customers to watch the premium content outside of Roku devices, like Roku TVs or media players, they’ll need to install the free Roku mobile app. The updated version of the iOS app is arriving today, and the Android update will be available in mid-February, the company says.

The selection of premium networks at launch includes: STARZ, Showtime, EPIX, plus Baeble Music; CollegeHumor’s DROPOUT; CuriosityStream; Fandor Spotlight; FitFusion; The Great Courses Signature Collection; Grokker; Hi-YAH!; Hopster; Lifetime Movie Club; DOX, LOLFlicks, Monsters and Nightmares, Magnolia Selects, and Warriors & Gangsters presented by Magnolia Pictures; MHz Choice; NOGGIN; Shout! Factory TV, Smithsonian Channel Plus; Stingray Karaoke; Tastemade; Viewster Anime; and ZooMoo.

Notably missing from the lineup is HBO, which offers its own over-the-top streaming service, HBO NOW, and has deals with a number of à la carte and streaming TV providers.

Roku says the Premium Subscriptions feature will become available on select Roku devices in the U.S. today. They offer a 30-day trial period, and are paid for using the payment info you have on file with Roku’s own billing system.

All supported devices should receive the update in the coming weeks, starting with Roku players and then Roku TVs. To see if your device has been updated, look for a new row called “Browse Premium Subscriptions” below the Featured row in The Roku Channel.

 

 

News Source = techcrunch.com

Suppose TV can now alert you to changes in TV packages, so you get the best deal

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Last year, a startup called Suppose TV entered the market to help consumers find the best deal on TV services. The site offers an online tool that lets you compare different services – including things like channel selection and pricing. But doing so still took a lot work in terms of entering your criteria, setting your channel priorities, and specifying other requirements . Today, the company is rolling out a new, automated feature to make this whole process even easier. With its “TV Service Alerts,” the startup can now email you when TV services change their prices, channel lineup or features. This way, you can make a cost-saving switch or jump to one that’s a better fit.

As the streaming landscape becomes more fragmented, this sort of thing could become a must-have tool for those who are getting overwhelmed by the various options, and don’t have the time to keep up with all the changes.

Today’s streaming services are constantly tweaking their offerings – editing their bundles, as well as hiking and lowering prices, as they try to figure out what works best.

Last year, for example, Sling TV, YouTube TV, DirecTV Now, and PlayStation Vue all raised their prices for live TV, and Netflix did for its subscription video service. Netflix has also just this month raised prices again, while Hulu dropped its price for subscription video, but raised its price for live TV.

Meanwhile, the packages are continually in flux, too. For example, Sling TV added a new free tier and  à la carte channel subscriptions; Hulu dropped some channels and put them into optional add-on bundles with newly added channels. And most keep adding channels to their packages and add-on selections over time.

Who can keep up with all this?

Suppose TV can help. The site may not be pretty, but it’s handy. Here, you can customize your prefered lineup, by setting your channel selections and feature preferences. Then, as the various streaming services’ packages change, it can now email you personalized alerts that tell you if you can get a better deal.

The company’s website can also help you find services where local broadcast and regional sports networks are available to you – something that varies on a market-by-market basis. (This is currently available across the largest U.S. markets and a selection of smaller ones.) And it can now point you to promo discounts and deals for streaming services, when available.

This sort of tool will become even more useful this year, as new services begin to arrive, like Disney+, Comcast’s NBCU streaming service, and the upcoming AT&T/WarnerMedia offering, among others.

For consumers, Suppose TV’s tools can help them make a better decision, but the startup’s business lies elsewhere.

The company is also today launching an API that provides access to its live TV database and recommendation engine, which will allow partners help their customers find the right mix of streaming services.

“With our API solution, Suppose supports the delivery of TV service selection tools by partner companies like broadband providers, television OS platforms, or retailers,” says Suppose TV co-founder Andrew Shapiro, in a statement about the API launch. “These companies are well positioned to help their customers sign up for and manage their TV services.”

 

News Source = techcrunch.com

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