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State of the Screens

What happened to the Roku Rocketship?

By May 5, 2022No Comments

Key numbers from Roku’s earnings:
1) 1.2M
 active accounts added in Q1
2) 61.3M total active accounts
3) 39% YoY increase in advertising revenue
4) 14% 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%)
6) 2022-Q1 – 61.3M (↑ 14%)

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%)
6) 2022-Q1 – $647M (↑ 39%)

8A6E.1-2022Q1B

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%)
6) 2022-Q2 – $10.55 (↑ 21%)

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%)
6) 2022-Q1 – 20.9B (↑ 14%)

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%)
6) 2022-Q1 – $0.031 (↑ 21%)

Bull case for Roku #1: International growth. 94% of their active accounts are in North America, with 88% in the U.S. alone.

Bull case for Roku #2: Growth in advertising revenue per hour.  Roku is building a full advertising stack that offers buying, measurement, and audience targeting.

 

Bear case for Roku: With Samsung, LG, Vizio, etc., the native OS/remote/experience has improved so much that consumers do not notice much difference.

Mr. Screens’ Crystal Ball: Advertising revenue per streaming hour will grow faster than subscriptions and/or streaming hours.  As long as they can keep users on their platform, they will build a monster advertising business.

Video: Roku Debuts Dynamic Linear Ad Insertion, Bringing Targeted Spots to Traditional TV

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.