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State of the Screens

Roku vs. Google Is Worth Watching

By May 13, 2021No Comments

Roky on Phone

Key numbers from Roku’s earnings:
1) 2.4M active accounts added in Q1
2) 53.6M total active accounts
3) 101% YoY increase in advertising revenue
4) 49% YoY increase in streaming hours

Dive deep: What Does Roku’s Rise Mean For Convergent TV?

Roku active accounts (YoY growth):
1) 2017-Q1 – 14.2M
2) 2018-Q1 – 20.8M (↑ 46%)
3) 2019-Q1 – 29.1M (↑ 40%)
4) 2020-Q1 – 39.8M (↑ 37%)
5) 2021-Q1 – 53.6M (↑ 35%)

Roku advertising revenue (YoY growth):
1) 2017-Q1 – $36M
2) 2018-Q1 – $75M (↑ 106%)
3) 2019-Q1 – $134M (↑ 79%)
4) 2020-Q1 – $233M (↑ 73%)
5) 2021-Q1 – $467M (↑ 101%)

Roku Revenue Breakdown

Roku advertising revenue per account (YoY growth):
1) 2017-Q1 – $2.56
2) 2018-Q1 – $3.61 (↑ 41%)
3) 2019-Q1 – $4.61 (28%)
4) 2020-Q1 – $5.84 (↑ 27%)
5) 2021-Q1 – $8.70 (↑ 49%)

Roku total streaming hours (YoY growth):
1) 2017-Q1 – 3.3B
2) 2018-Q1 – 5.5B (↑ 67%)
3) 2019-Q1 – 8.9B (↑ 62%)
4) 2020-Q1 – 13.2B (↑ 48%)
5) 2021-Q1 – 18.3B (↑ 49%)

Roku Engagement

Roku advertising revenue per streaming hour (YoY growth):
1) 2017-Q1 – $0.011
2) 2018-Q1 – $0.014 (↑ 24%)
3) 2019-Q1 – $0.015 (↑ 10%)
4) 2020-Q1 – $0.018 (↑ 17%)
5) 2021-Q1 – $0.025 (↑ 45%)

Why this matters: Roku grew total streaming hours (↑ 49%) along with revenue per hour (↑ 45%), leading to a 101% YoY growth in advertising revenue.

Battle lines drawn: Roku pulled YouTube TV (streaming pay-TV) from its platform after disagreeing on various issues.

Big question #1: How did Google respond?

Quick answer: Nerd magic. Google embedded the YouTube TV app into another app (YouTube) that was still available through Roku’s platform.

YouTube TV

Big question #2: Is this disagreement over revenue sharing (money)?

Quick answer: Not exactly. Roku and YouTube’s disagreement includes upgrading video compression and Roku’s voice search.

Why this matters: The battle over voice search and universal guides will be key in the coming years. Google only wants YouTube content to appear when a user conducts a voice search from within their app. Roku wants to run a global search across all apps.

Flashback #1: Streaming Wars Moving Upstream

Quote from Janko Roettgers – Senior Reporter @ Protocol:
“Roku also alleges that Google aims to dictate how the streaming device maker treats voice search results. According to those allegations, Google wants to force Roku to only show YouTube results when someone launches a voice search from within the YouTube app. If, for instance, someone browses YouTube and then decides to listen to music, a voice query like “Play ‘Uptown Funk'” would open the song on YouTube, even if the consumer had set Pandora as their default music app.”

Flashback #2: Roku’s Louqman Parampath on the Future of Connected TV

ScreenBytes Louqman

More #1: How Roku’s ad sales boss Alison Levin successfully steered through the pandemic

 

More #2: Roku Sells You TV Dongles. So Why Is It Making TV Series?

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.

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