Roku, America’s number one device for streaming OTT services, has found a new way to capitalize on its 15.1 million monthly users. The company, which relies heavily on the sales of its hardware to generate revenue, has launched a new ad-supported streaming service titled “The Roku Channel.”
The company has struck licensing deals with Lionsgate, MGM, Sony Pictures Entertainment, and Warner Bros to bring to the service such films as “Ali,” “The Karate Kid” and “Legally Blonde.” Additionally, Roku is working with companies that already have channels via its platform, including American Classics, Fandor, FilmRise, Nosey, OVGuide, Popcornflix, Vidmark and YuYu, to help spotlight their free programming.
According to its blog, the company plans to offer half the amount of advertising that would air on a traditional hour of linear television.
Though users stream more than 3 billion hours of content on the device each quarter, until today, most of those streaming hours didn’t impact Roku’s bottom line– not even Netflix, which accounts for a third of Roku’s streaming hours. As of now, the company generates $11.22 per active user– up from $8.32 from last year.
Roku’s new service probably won’t dethrone Netflix in terms of viewers, but it will help the company to leverage its own growing user base, rather than relying so heavily on the sales of its hardware.