Roku Changes AVOD Game, Turning Quibi's Lemons Into Lemonade

Roku has grown into a connected TV titan in recent years, now boasting 53.6 million active accounts in large part due to the rapid growth of its AVOD offering, The Roku Channel. When short-form streaming service Quibi self-destructed last year, Roku took a big gamble. In January, it bought 75 former Quibi titles, rebranded them as Roku Originals and began rolling them out in May to continue growing its own platform. The bet paid off almost immediately. In the first two weeks after 30 Quibi-turned-Roku-Originals debuted, more active accounts streamed them on The Roku Channel than the number of Quibi accounts did in the entirety of that streamer’s brief eight-month lifespan. Now, the instant success of Roku Originals is causing both the connected TV giant and buyers to once again expand the already vast possibilities of the exploding AVOD space. “We're really excited about it coming out of the gates here, and certainly it opens up a new avenue of growth and a new way to bring great, compelling content to our users,” Rob Holmes, Roku’s vp of programming, told Adweek. Unlike when they were on mobile-only Quibi, these shows can now be streamed on TVs, and Holmes said the “vast majority” of streaming hours on The Roku Channel take place on the television. “Ultimately these are TV shows, and people like watching TV on the big screen in the living room, so I think that's another element,” Holmes said. “Another huge switch was we made it free.” Marketers also view Roku’s venture into originals as “enormously positive,” said Kelly Metz, managing director of linear activation at Omnicom Media Group, pointing to the platform’s large reach, device footprint and strong identity. “It [incentivized] them to give us transparency down to the program level, which we want from Roku from the buy-side, and now that they're owners of content, they can provide that directly,” explained Metz. “From a programming perspective, it's great news for us. We want to see more premium content in the AVOD space versus the SVOD space because obviously we place advertisements for our clients.” The resounding initial success of Roku Originals has only caused the company to lean further into The Roku Channel and additional acquisitions. Roku is now looking into commissioning original programming from scratch, not simply acquiring content as it did with the Quibi deal. “We saw this opportunity to really aggregate content for consumers to make it easy for them to find,” Holmes said. “We're going to continue to pursue an expansive strategy around the content that we acquire. It's a great way for those partners who maybe don't have their own direct-to-consumer capabilities or don't want to invest in their own direct-to-consumer capabilities to participate in the streaming ecosystem.” Sidebar: Succeeding Where Quibi Failed In the first two weeks after The Roku Channel began streaming former Quibi content, rebranded as Roku Originals: a record number of accounts streamed The Roku Channel.the top 10 most-watched programs on the platform were all Roku Originals.more than one in three Roku Channel users streamed a Roku Originals series, watching more than nine episodes on average.Roku has already renewed Die Hart, starring Kevin Hart, for a second season. MoffettNathanson senior analyst Michael Nathanson believes that bringing in original content provides an incentive for customers to remain on The Roku Channel despite an ever-growing number of competitors. “That's their future monetization growth," Nathanson said. “As more media companies take back their own content—you've seen WarnerMedia now [merging] with Discovery; you've seen Amazon buy MGM—Roku needs more original content in order to stand out and to monetize and to build impressions.” Roku isn't the only AVOD dipping its toes into the original content pool, either. Fox's Tubi plans to debut 140 hours of original content in the coming year, and Amazon's IMDb TV is expanding its originals slate. Nathanson believes that all players in the AVOD space will ultimately have to add more original content. “[Roku's] first-party data and data gathering is quite good. And I think what they see going forward is that they can do more targeted media,” Nathanson said. “Those other AVOD services are going to have to catch up a bit on their ability to really target.” And while its rivals play catch-up, Roku is squarely in the driver's seat. “It's made investments in trying to build out a better dynamic ad insertion mousetrap,” Nathanson said. “They're putting pieces together to be a better monetizing company than their competitors.”

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Roku Changes the AVOD Game by Turning Quibi's Lemons Into Lemonade

Original content is a win-win for both buyers and connected TV platforms

Mollie Cahillane

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