This is What Roku Thinks of Pluto TV and vMVPDs like YouTube TV & Hulu Live TV
Yesterday, Roku announced their 2018 Fourth Quarter results and shared that they added 3.3 million new active accounts. The company continues to focus on growing their platform business which surpassed $150 million in revenue for the first time, up 77% year-over-year. Over two-thirds of their platform revenue comes from ads and sponsorship on the Roku interface and The Roku Channel.
On their earnings call, they were asked the impact of Viacom’s acquisition of Pluto TV and how Live TV Streaming Service impact their business.
According to Roku’s SVP of their Platform Business, Scott Rosenberg, Viacom’s acquisition of Pluto TV seems to validate their AVOD strategy with The Roku Channel.
“We are the original, original in terms of bullishness on AVOD both in terms of its value to consumers and its importance in the OTT business model. We see AVOD growing pretty nicely on our Platform and clearly a growing recognition in the industry as the importance of AVOD.”
He shared that they can help Viacom monetize the Pluto TV by either driving “channel installs” or syndicate the content through The Roku Channel with a revenue share.
“Just a quick reminder on how we monetize in AVOD. As a content owner, there are really two ways onto our platform. You can publish an app and then work with us to promote that app through ads, through featured free. And Roku participates in that process typically by selling a portion of the inventory.”
“Or you can syndicate that content directly into The Roku Channel in which case we drive the promotion and awareness of that content in the monetization and share back with the content owners.”
In terms of vMVPDs like Fubo, PlayStation Vue, Hulu Live TV, and YouTube TV, Roku CEO, Anthony Wood feels that they help drive awareness of Roku devices and engagement on the platform.
“So, I would just say, in general, virtual MVPDs are great for Roku and I’ll give you some specific examples of how. One is they convince some people — people moved to streaming for a variety of reasons. For many people a virtual MVPD is sort of the thing they need to move to streaming. So, it drives more streaming usage on our platform which makes which means that Roku is more relevant to consumers our consumer’s life.”
They also are able to generate revenue share of sign-ups on the platform and help fill ad inventory on the vMVPDs.
“If they sign up for the subscription service through Roku then we generally get a rev share that’s our general subscription business model. If they sign-off off of Roku, then we don’t generally get a rev share, but there are ways we monetize. For example, virtual MVPDs are customers of ours for our audience development business. So they are often buying promotion placement in Roku’s user interface or other audience development products that we sell. So they’re a big customers of audience development even if they — the customer comes off of Roku.”
“And then we have a variety of ways we participate on the advertising front with our partners including virtual MVPDs and those don’t always have a direct relationship to where the customers signs up for the service. So in general, they’re great customers and partners for us.
It’s clear that Roku is in a strong position to take advantage of the trend of cord-cutters. They feel that by the end of 2019, they will reach $1B in revenue with two-thirds of that coming from their platform business including Roku TVs.