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While many of its linear counterparts are still staggering from the impact of Covid-19, Roku continues to thrive.
The platform had another record year and quarter, it told investors today, more than doubling monetized video advertising impressions year over-year and seeing unprecedented streaming activity from its now-51.2 million active accounts. That number, it noted, is more than twice the number of video subscribers to the country’s biggest cable company, Comcast.
As cord-cutting accelerated during the pandemic, Roku added more than 5 million accounts in the fourth quarter and 14 million overall in 2020, a 39% year-over-year gain. The Roku operating system was the No. 1 smart TV operating system in the country, representing a 38% share of all smart TVs sold.
Meanwhile, streaming hours on the platform hit a record 58.7 billion in 2020, a 55% increase over 2019, with Roku users averaging 3.8 hours on the platform each day, up 10% year over year. The company now has every major OTT service on its platform, following distribution agreements with HBO Max in December and Peacock in September.
Amid the streaming surge, advertising has returned to pre-pandemic levels, which the company said was due to the continued growing interest in streaming by traditional TV advertisers, as well as its ongoing investment in its OneView ad platform and overall ad-tech capabilities.
“Monetized video ad impressions were up over 100% in Q4, rebounding to pre-Covid growth levels. Across the industry the impact of streaming is increasingly evident; consumers are cutting the cord,” CEO Anthony Wood said during the company’s earnings call Thursday afternoon. “The traditional TV upfronts are beginning to crumble as advertisers demand more flexibility, better measurement and a broader audience.”
And that robust advertising interest is expected to continue: Roku said in its letter to shareholders that the six largest agency holding companies more than doubled their investment year over-year, while also committing to a “significantly larger” upfront investment with the platform this year.
“I think 2020 was a transformational year for TV marketers to understand that viewership is leaving linear TV and not coming back,” Scott Rosenberg, svp and general manager of platform business, told reporters ahead of the company’s earnings call.
As part of its advertising growth this year, Roku noted that while the retail category spent 7% less on linear advertising in Q4 year over year, retail advertising spend on its platform more than doubled in the same time period.
Adding Quibi content to the Roku Channel
Roku is also seeing growth on its free, ad-supported streamer, The Roku Channel, which as of Q4 reaches U.S. households with an estimated 63 million people.
The platform is looking to grow that audience even more. Last month, Roku snagged the exclusive global rights to stream programming from the failed short-form streaming service Quibi. As part of the deal, Roku will also premiere more than a dozen new programs that had been produced by Quibi but never aired on the streaming service before its quick shutdown late last year.
While Rosenberg declined to comment on reports that Roku may dabble with creating original programming, he did note that “there is some optionality build into the rights that we’ve acquired” to producing some of the Quibi shows.
There’s no word yet on when that content will launch on The Roku Channel, but the company plans to use Quibi to further accelerate the growth of its AVOD channel, which is growing twice as fast as the platform overall.
“It was a unique opportunity for us. We felt there was great original content to be had at an attractive price. It’s enabling us to be more creative and expansive in the things that we can do to fill it with content,” said Rosenberg of the Quibi deal.
Roku sees multiple opportunities to expand The Roku Channel, particularly when it comes to linear content. The company added more than 50 linear channels in Q4, and now has around 165 free linear channels overall.
The Roku Channel also is important to Roku as part of its larger platform. “It’s not simply an app,” Rosenberg said. “It’s tightly integrated into our knowledge and the user. We have the promotional capabilities, we’re able to run machine learning driven recommendations in the UI. For many rights owners, it’s an alternative or complement to their app’s distribution strategies.”
