Roku Adds 2 Million Active Accounts, Surpassing 29 Million Actives & Almost 9 Billion Streaming Hours
As part of their Q1 2019 financial results, Roku announced that they now have 29.1 million active accounts. This is after the company added 2 million last quarter, and over 8.3 million (+40%) since the first quarter last year. With more users, and with them streaming even more, streaming hours increased from 5.1 billion to 8.9 billion (+74%) over the last year.
In comparison, just last month, Amazon revealed that they had more than 30 million active users, up from the 25 million that they announced in October 2018.
Much of Roku’s user growth is coming from licensing the Roku platform to Smart TV manufacturers. The company reported that nearly 1 in 3 Smart TVs sold in the first quarter now use the Roku platform. The company continues to focus on growing their platform business which surpassed $134 million in revenue, up 79% year-over-year. Over two-thirds of their platform revenue continues to come from ads and sponsorship on the Roku interface and The Roku Channel.
The growth in the platform business means that Roku Players, like Roku Premiere and Roku Ultra, now only make up 35% of the company’s revenue. Player revenue grew 18% year-over-year, but with dropping prices of the devices, Player gross profit was down 27%.
Earlier this year, Roku’s CEO Anthony Wood shared that they expect to reach $1 billion in revenue in 2019, by focusing on increasing monetization per user and scaling the number of households using the Roku platform. Since last year, Average Revenue Per User has increased from $15.07 to $19.06 - driven by a doubling the number of monetized video ad impressions.
This is the first quarter since launching their Amazon Channels competitor which allow Roku users to purchase premium services like HBO, Showtime, STARZ, and Epix using their Roku account. It does not come as a surprise that Roku is taking on Amazon Channels.
This comes as reports expect Amazon’s Prime Video Channels business to net $500+ million from their streaming partners. Amazon currently drives 53% of HBO’s direct-to-consumer subscribers, so streaming companies are hoping to expand their acquisition channels.
While Apple is also launching their own competitor called Apple TV Channels, they announced in March that their TV App would be coming to Roku devices later this year. While it is uncertain how this will help Roku make money, in March, Roku’s CEO gave insight into the company’s strategy.
Wood went on to share that while they have customers that have a Roku and pay TV subscription, “we have customers - a little over half, who don’t have a pay TV subscription.” And he feels that those Roku’s best customers because they “they watch more Roku.” And the more Roku customers watch, the more money that Roku makes.