Roku’s Q2 Reports Indicate a Rising Trend in Revenue and Active User Base
On July 27, Roku announced its Q2 financial results, showing a jump in active accounts and platform revenue. Roku added 1.9 million net active accounts, compared to 1.6 million during Q1, while the total net revenue was $847 million, an 11% rise from its previous year. Platform revenue (The Roku Channel and advertising) delivered $743.8 million.
Roku also reported a net loss of $126 million compared to $212 million in Q1 2023 and $110 million in the previous year.
Considering Roku’s continued bets on advertising (via The Roku Channel), it noted that “the macro environment continued to create uncertainty with the total U.S. advertising market flat YoY in Q2. Ad spend on traditional TV declined 9.4% YoY, and traditional TV ad scatter was down 17.2% YoY”
For more details, please read Roku’s official letter to its shareholders.
Roku’s Positive Performance in Q2
While the number of active accounts on Roku has increased, global streaming hours remained consistent at 25.1 billion compared to the first quarter but exhibited a 21% growth year over year.
These international streaming hours translate to an average of 3.8 hours of streaming per active account per day.
Moreover, the company reported more than 50% year-over-year growth in streaming hours on The Roku Channel’s free ad-supported streaming TV (FAST) service.
Roku’s Growth Through Continous Product Interventions
Roku Channel was launched on September 2017 in the USA as a FAST service, along with their already existing library of 5,000 channels with access to 500,000 movies and TV episodes. Additionally, Roku Channel partnered with top studios like Lionsgate, Metro-Goldwyn-Mayer (MGM), Sony Pictures Entertainment, and Warner Brothers, providing content for free.
Following its success in the US, Roku expanded its reach to the UK on April 7, 2020, with over 10,000 movies, TV series, and documentaries.
As part of its efforts to further expand its content library, Roku, in January 2021, made a significant move to expand its content library by acquiring the rights to Quibi’s original content, comprising over 75 shows. Rebranding this content as Roku Originals, the platform launched an impressive set of 30 original series, featuring renowned stars such as Kevin Hart, Anna Kendrick, and Jennifer Lopez.
The launch of Roku Originals became a milestone for the channel, reaching an estimated 70 million US households by Q1 2021. This successful initiative cemented Roku’s position in the streaming industry and underscored its dedication to providing high-quality, exclusive content to its users.
During the two weeks post the Roku Originals launch, from May 20 to June 3, The Roku Channel experienced a surge in unique account streams. Notably, all the top ten most viewed programs during this period were Roku Originals.
Owing to the rapid growth of engagement on FAST channels, Roku announced its plan to significantly expand its Free Ad-Supported Television (FAST) channel selection, broadening its scope beyond on-demand programming. As a result, Roku users gained access to Spanish-language news from NBCUniversal Telemundo, live shopping shows from QVC and HSN, and the AMC Showcase Channel, which broadcasts popular series like Mad Men and The Walking Dead. By the end of 2022, ROKU had over 350 FAST channels.
Continuing its expansion, Roku added 18 more FAST channels to its content library. As a result, its content offering ranges from Power Rangers to News Channels & more.
In its ongoing efforts towards innovation, Roku made a significant step by introducing the first-ever Roku Select and Plus Series TVs in March 2023. Combining their streaming leadership with hardware expertise, these smart TVs gave users access to free live TV, news, sports, and popular features like Find My Remote and Private Listening.
After completing the ecosystem by bringing together streaming services and TV, Roku is expanding its reach to other service providers. As a result, The Roku Channel is now available on Google TV and Android TV OS devices, accessible via download from the official Google Play store. It boasts over 80,000 titles, including Roku Originals and 350 live TV channels.
In contrast, Google entered the Free Ad-Supported Television (FAST) services in December 2021 by partnering with Pluto TV, a subsidiary of Paramount Streaming, which offers over 300 live channels.
In its attempt to become a market leader, Google TV has been actively adding more FAST channels to its platform and claims to have incorporated over 800+ FAST channels into its offerings.
Despite major OTT giants like Hotstar and Viaplay undergoing financial struggles and staff cutbacks, Roku has thrived, thanks to its constant innovation and trend awareness.
Ragul Thangavel
With over nine years of diverse professional experience, Ragul has made significant contributions across various domains, including Media Operations, OTT Technologies, Video Production, Ecommerce, and Social Media.
Holding an Engineering degree, Ragul's career took an unconventional turn when he discovered his passion for writing, leading him to begin his journey as a content writer.
His career has been exclusively dedicated to the growth and development of startups, where he has played a pivotal role. His unique blend of technical knowledge and creative prowess has enabled him to drive innovation and success in every venture he has been a part of.