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State of the Screens

Inside Roku’s battle to control the future of TV advertising — and why it better watch out for…

By June 13, 2018No Comments

The exploding userbase for OTT/Connected-TV is driving a projected 93% increase in Roku’s advertising revenue to $293M this year.

Flashback: How TV Buyers Can Capture the Value of Digital Video

Connected TV users by year (% growth):
1) 2017–168.1M (↑ 10%)
2) 2018–181.5M (↑ 8%)
3) 2019–188.1M (↑ 4%)
4) 2020–191.6M (↑ 2%)
5) 2021–194.4M (↑ 2%)

What is driving this growth in revenue? Roku is off to an early lead in OTT advertising with 83% of the ads delivered in April.

Share of OTT ads delivered in April:
1) Roku — 83%
2) Other — 11%
3) Amazon Fire — 4%
4) Sony Playstation — 2%

More #1: Murdoch: Ad-Supported And Ad-Free Hulu Options ‘Empower The Customer’

Hulu subscriber base:
1) $7.99 with advertising — 40%
2) $11.99 without advertising — 60%

Quick math:
1) $4/month to remove commercials
2) 9 minutes of commercials per hour
3) 18 30s spots per hour
4) Assuming $50 CPM
5) $0.90/hour in ad revenue generated per user
6) At $4/month for no ads, Hulu makes more $ from anyone who watches less than 4.4 hours per month.

More #2: Connected TV: A Hero Is Rising

More #3: Streaming Sticker Shock

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.