Roku’s Platform Business Is Just Getting Started

The big question: How large can Roku’s ad business really become?

Total video subscribers:
1) AT&T — 25.4M
2) Comcast — 21.2M
3) Roku — 20.8M

Total ad revenue in 2017:
1) Comcast — $2.3B
2) Roku — $264M

Ad revenue per subscriber in 2017:
1) Comcast — $106
2) Roku — $15

The streaming wars are heating up! AT&T recently announced2 new streaming services to go along with it’s DirecTV Now offering. One of the services will be sports-free and start at$15/month while the other will be higher end ($80/month) with the goal of moving 25M satellite subscribers to streaming.

Quote from Randall Stephenson — CEO @ AT&T:
“Think about our traditional DirecTV product at a much lower cost point, meaning you don’t have satellites on roofs, you don’t have truck rolls. In fact, to provision this, the only truck roll required is going to be a UPS truck to deliver a very thin piece of hardware that you plug into your TV and your broadband outlet… The subscriber acquisition costs are literally 1/4 of what you see today.”

The streaming wars (monthly cost):
1) Hulu Live — $40
2) DirecTV Now — $35
3) Sling TV — $20
4) PlayStation Vue — $40
5) YouTube TV — $40
6) Verizon — TBD
7) Charter Spectrum TV Stream — $22
8) CenturyLink — $15
9) Comcast Instant TV — $18
Philo — $16
11) Spectrum Choice — $25
12) AT&T WatchTV — $15
13) DirecTV TBD — $80

More #1: Deeper Dive — Why economics are driving pay TV disruption, not user experience

More #2: Virtual Pay TV Market Set for a Shakeout: Analyst

More #3: Here’s How Much More Satisfied Customers Are With Streaming Services Than Subscription TV

More #4: New Amazon Channels Data Shows Why Apple Wants to Copy It


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