Recently, Roku has seen very strong growth from its ads and subscription business. According to Roku’s 3rd quarter 2019 earnings, Roku saw revenue from ads and subscriptions jump 112.2 million, up 59% over the same period in 2018. This is compared to revenue from streaming player sales that was just 6.2 million.
That works out to be about $22.58 in revenue from every one of Roku’s 32.3 million active accounts in the 3rd quarter.
When asked about how much money Roku made off its hardware last year, Roku’s CEO said: “We don’t really make money… we certainly don’t make enough money to support our engineering organization and our operations and the cost of money to run the Roku service,” Roku’s CEO Anthony Wood said. “That’s not paid for by the hardware. That’s paid for by our ad and content business.”
Roku seems to be following in the steps of Google, focusing on offering cheap devices and free services to build ad and subscription revenue. During Roku’s 3rd Quarter 2019 Earnings Call Roku said that ad-supported viewing on Roku is growing faster than subscription viewing. If this continues, Roku should continue to see growth in its ad and subscription revenue.
Roku is one of the largest suppliers of ads on your TV and as streaming grows, Roku is poised to take advantage of the growing number of free ad-supported streaming services like STIRR, XUMO, and Pluto TV. With Roku offering Roku players starting at just $30 and Roku smart TVs accounting for 1 in 3 smart TVs sold in the United States, it is likely Roku’s active user base will continue to grow.
As other streaming players focus on revenue up-front, Roku who focuses on affordable streaming players supported by revenue with ads and subscriptions is now the largest streaming player in the United States.
Update: We updated this story to correctly list that Roku makes $22.58 a year in revenue per user.
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