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4 Reasons Roku Is Completely Disrupting Television

Written by on November 18, 2018

4 Reasons Roku Is Completely Disrupting Television

Netflix customer Arthur Michelson demonstrates the online Netflix movie service Roku at his home in Palo Alto, Calif., Thursday, July 23, 2009.

Television is changing.  Instead of getting content through traditional cable or satellite services, consumers are “cutting the cord” and streaming shows, movies and games directly to their television set from the internet.  One company, Roku, is helping to lead this charge by providing customers with the simple hardware they need to turn off cable and turn on streaming. When we looked into this trend, we were surprised at just how much traction it had gained.

LikeFolio data, which tracks social media mentions of brands and products being purchased by consumers.  In Roku’s case, LikeFolio is looking for indications that users have purchased one of their products or are trying Roku for the first time.

When we dig into this data we see four critical consumer insights that could turn Roku into the next big household name:

1) Streaming is taking over and Roku is riding the wave

More and more customers are ditching cable and satellite TV in favor of streaming content directly from the internet.

Consumers are cutting the cord with cable companies more often, and Roku is benefiting.LIKEFOLIO

In fact, Dish Network just announced that over the past year it has lost 192,000 subscribers to its satellite DISH TV service but gained 41,000 subscribers to its Sling TV offering.  More on Sling in a minute…

Roku is lauded for its ease of use — making “streaming” from various sources like Netflix, Amazon and YouTube as simple, if not more so, than watching cable.  In fact, Roku is often mentioned alongside Amazon Fire, Apple TV and Google Chromecast as the best streaming device.

Purchase Intent mentions show Roku in a tight battle with major streaming device competitorsLIKEFOLIO

3) Traditional providers are actually giving them market share (Sling TV from Dish)

Earlier this year, Sling TV began offering a free Roku Express to new subscribers of its streaming service.  This has the combined benefits of increased revenue as Dish purchases the Rokus and gets consumers familiar with the Roku interface and functionality, feeding into the company’s product upgrade cycle.

Sling is growing in popularity and giving away Roku devices to new subscribersLIKEFOLIO

Interestingly, if ROKU were a cable company, it would be the third largest in the country with 22m subscribers…and just 10% growth away from taking the top spot from AT&T.

4) Better monetization through personalized ads

Roku’s active users are spending an average of 2.8 hours per day watching streaming content on the device.  To help monetize this, Roku has launched its own ad-supported movie channel, which is gaining steam inside of its user base.

Consumer interest in Roku’s ad-supported movie channel is increasingLIKEFOLIO

What’s really powerful about this is the way Roku is approaching ad-serving on its platform.  Much like Google and Facebook disrupted traditional online (banner) advertising with personalized ads, Roku is actually serving each and every ad in a personalized manner.  That means the ads are more effective and can command a much higher price per view than traditional blanket advertising.

A recent report by Capital Market Labs makes the case that Roku is aiming to be the Facebook of Television, noting this ad personalization and the fact that Roku is making this channel free on the web, with no hardware required.

Summary

Consumers are in the midst of a major shift from traditional TV content to the more personalized (and cheaper) streaming approach.  Roku is not only riding the wave, but creating new and improved ways to cash in on each of those eyeballs.

I am a technologist, entrepreneur, bourbon connoisseur, sports fan, and co-founder of LikeFolio.

— Andy Swan is the founder of LikeFolio, which provides investors and companies with actionable research based on social-data.


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