Roku Adds 43 Million New Accounts in Second Quarter

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Roku’s Q2 revenue increases 42% annually to $356 million

(Photo by Monica Schipper/Getty Images)

Device manufacturer Roku saw its revenue increase 42% year-over-year to roughly $356 million, thanks to ongoing shelter-in-place orders accelerating the number of users creating new accounts and an unlikely increase in its ad business as the overall TV ad industry continues on a downturn. The Los Gatos, California-based content aggregator and smart device manufacturer grew its advertising business in the second quarter despite the ongoing pandemic, and its monetized video ad impressions doubled year-over-year. There were 43 million new active Roku accounts added in the second quarter, a 41% annual increase from 30.5 million accounts added in second quarter 2019 — the largest net increase in active accounts in Roku’s history outside of a fourth-quarter holiday period, the company said. Roku users streamed 14.6 billion hours of content this quarter, up from 2.3 billion hours this time last year. Roku said its average revenue per user was roughly $24.92 per account, up 18% annually. “It’s really a function of consumers cutting and shaving the chord as a result of the pandemic, both as live television productions and sports stopped. Those were the main services that keep consumers in the traditional paid TV package,” Scott Rosenberg, Roku’s general manager of Roku’s platform business, told TheWrap. “Some (consumers) did it of financial necessity as well, paid TV is expensive… and that’s ultimately what we would attribute to the surge in active account growth as well as a surge in usage.” Despite consumer interest in newly-launched streaming apps Peacock from NBCUniversal and WarnerMedia’s HBO Max, Roku still hasn’t inked any deals to carry Peacock or HBO Max — as of now, neither app is available on a Roku device. “It is our goal to carry these services, we look for a win-win relationship that will help new content providers get scale in OTT and get economics for Roku,” Rosenberg said during the earnings call. “We’re not always going to be first, but we think it’s achievable and we’re excited to be a new platform for these services.” Chief executive Anthony Wood said during Roku’s earnings call that it had the largest share of users watching “Hamilton” when it was released on Disney+ fourth of July weekend. “We’re looking to do more of those types of deals,” Wood said, but he didn’t specify when consumers might be able to use HBO Max and Peacock on their Roku devices. Rosenberg told TheWrap that Roku does stand to benefit from adding HBO Max and Peacock to its devices eventually, and said, “it’s a key part of our business model that we participate in the economics of the growth of our partner services, that’s ultimately how we invest back into the platform. Roku’s monetized video advertising impressions doubled year-over-year in the second quarter and reported that its count of first-time ad clients was up 40% year-over-year. Its total net loss increased by roughly $33.8 million to $43.1 million according to the earnings report. “The ad industry outlook remains uncertain for Q3 and Q4, and we believe that total TV ad spend will not recover to pre-COVID-19 levels until well into 2021,” Roku founder and CEO Anthony Wood said in an earnings statement Wednesday. “However, we remain confident in our ability to grow our ad business, albeit not as much as we would have expected prior to the pandemic, as marketers re-allocate spend and follow consumers in the shift to streaming.” Roku’s stock price was down roughly 1.7% at $162.42 per share at market close on August 5.


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