Is Your Favorite Streaming Service About to Put Permanent Ads on Its Home Screen?
Roku is bringing more ads to its home screen, including restaurants and other non-entertainment categories. More streamers could follow suit.
Roku didn’t make any enormous content announcements at the 2024 Consumer Electronics Show in Las Vegas earlier this month, but it did unveil a new line of smart TVs powered by its operating system. Buyers of those TVs will see more ads embedded on their set’s home screen, as Roku is turning the home screen on its devices into a hub for more ads. The streaming leader has always been primarily an advertising platform, but it will be rolling out even more ad placements as this becomes the new normal in streaming.
- Roku will put more ads on its home screen, making Roku devices more closely resemble Telly TVs which are equipped with a second screen for permanent advertising.
- The ad industry is continuing to slump, and providers know their symbiotic relationship with advertisers is an important one.
- Customers may find cord-cutting doesn’t necessarily mean fewer ads, just different forms of ad delivery.
What Kind of Ads Are Coming to Roku’s Home Screen?
Roku has been doing a lot of experimenting with ads lately, in the name of improving revenues from that key segment of its business. Despite The Roku Channel being streamed for 26.7 billion hours in the third quarter of 2023, Roku’s average revenue per user dropped during the quarter. That’s leaving the company turning over every couch cushion in search of a few extra dollars. In July it introduced shoppable ads to help in its quest to drive more revenue.
As announced at CES 2024, Roku will begin placing more ads on its home screen in the near future as well. Roku’s VP of global ad sales Kristina Shepard told AdExchanger that Roku would “immerse advertisers in more parts of the home screen.”
Customers with Roku devices will eventually escape the ads on the platform once they enter an ad-free streaming service, but it’s a big step toward Roku showing customers even more ads permanently. That’s a step that Telly, the TV manufacturing startup that has partnered with advertisers to give away thousands of TV sets equipped with a second screen that shows ads at all times, has already taken.
Telly first opened registration for its free TVs in May 2023. Prospective owners had to answer some basic questions about their TV viewing habits, data which would then be sent to advertisers to learn more about that person’s preferences. Watchers also had to agree to make Telly’s TV, with its second screen that displays ads whenever the big screen is in use, the main TV set in their household.
Roku hasn’t gone as far as creating another screen with permanent ads for its own TV line, but it clearly wants to get cozier with advertisers and generate more revenue by incorporating a higher number of ads and putting them in places they weren’t seen before.
Will Other Streamers Follow Roku’s Lead?
Unfortunately for the ad-averse streaming customers out there, more ads could be coming to streaming menus besides Roku’s if that provider’s new experiment with home screen ads proves successful. Between January and October 2023, ad revenues generated by streaming platforms fell 8% year-over-year, and that’s bad news for distributors and advertisers alike.
TV providers and ad agencies rely on each other. Money from streaming ads will become increasingly important to legacy media companies like Disney, Warner Bros. Discovery, etc., who are trying to figure out what to do with their linear TV channels, which are losing viewers (and thus traditional ad revenue) fast. Streamers have already begun fudging the term “ad-free”; many platforms frequently show pre-roll ads for other titles in their libraries before shows or movies start. AMC+ and Paramount+ are just a few of the platforms that do this; the latter of which only recently introduced a Skip button for subscribers.
Will subscription video services start placing ads on their home screens the same way that Roku — a traditionally ad-supported platform — has? It’s certainly possible, and those ads could find their way onto the user interfaces of devices manufactured by Amazon, Apple, Google, and others. In fact, Amazon introduced full-screen ads for streaming titles that auto-play on Fire TV devices when the device is activated in November.
Nearly every streaming provider now has an ad-supported paid streaming plan, or a free streaming service with live and on-demand content that features commercials with playback. The ad market has not seen the rebound many analysts thought, however, and streaming providers might see ads embedded in home screens as a mutually beneficial way to improve their fortunes and the fortunes of advertisers as well.
Roku Channel
The Roku Channel is a free live TV streaming service that provides 350+ live linear streaming channels and more than 80,000 free movies and TV shows. The library contains entertainment from several different decades, including some major hits.