Roku ROKU has reportedly announced a big update to its free, ad-supported platform, the Roku Channel, bringing the experience of watching linear TV to its popular streaming devices with a new Live TV channel guide.
Per a cnet report, the company plans to add 30 new channels to the existing lineup of 100-plus viewing options that can be accessed via the Roku Channel.
The guide comes with features to switch between “All Channels” and “Recent Channels” viewed besides flipping between channels by clicking the navigation buttons on the remote. Users can access the live guide, which features 12 hours of programming information, through a branded, purple tile inside the Roku Channel.
The number of live channels added to the service has also prompted an interface facelift designed to help users find channels while still being able to watch live as they search through the channel catalog.
Roku, Inc. Price and Consensus
Roku, Inc. price-consensus-chart | Roku, Inc. Quote
Partnership With Other Free Streamers Expands Portfolio
Roku’s partnerships with rival free video streaming services, including ViacomCBS VIAC owned Pluto TV and Comcast’s CMCSA XUMO is a game changer.
New channels inside Roku’s updated portfolio include ViacomCBS channels such as Game Show Central and several MTV-branded stations, all stamped with Viacom's Pluto TV brand. Media publisher Conde Nast is well-represented by channels like Conde Nast Traveler and Vanity Fair. Live news stations include Reuters and ABC News.
Markedly, in May, the top-viewed channel on YouTube, CoComelon, joined the Roku Channel lineup. Its shows in the kids and family category are among those accounting for one-fifth of the 100,000 movies and TV episodes available through the channel.
Roku’s Efforts to Attract Ad Revenues & Active Users
The coronavirus outbreak prompted sky-high television and streaming viewership among American families. Roku added 2.9 million incremental active accounts in the first quarter of 2020 to reach 39.8 million. Streaming hours increased by 1.6 billion hours sequentially to record 13.2 billion hours in the first quarter.
Moreover, Roku’s streaming platform experienced an 80% surge in viewing hours in April compared with the same month in 2019. Meanwhile, lockdowns and shelter-in-place guidelines due to coronavirus helped Disney+ streaming service exceed 50 million paid subscribers globally as of Apr 8 in just five months since its launch.
Although Netflix NFLX added 15.77 million paid subscribers globally in the first quarter, up 64.3% year over year, the streaming giant expects viewing and subscriber growth to decline once the coronavirus-related lockdowns and movement restrictions are lifted.
The Roku Channel may be seen as a threat both in terms of viewership and advertising revenues by the likes of subscription-based streaming service providers like Netflix, Amazon prime video, and Disney’s Disney+, all of which make their services available on Roku’s platform.
The live content on Roku Channel is free to view in exchange for eight minutes of advertising time per hour. Roku sells the ad spots on an ad-spot bidding platform built around assets from ad specialist Dataxu, which Roku acquired for $150 million last fall.
Even amid the pandemic, which saw weakness in advertising demand, Roku generated $232.6 million in first-quarter platform revenues, which includes ads and licensing fees, against only $88.2 million from device sales.
In May, this Zacks Rank #3 (Hold) company revamped its ad platform to give advertisers a way to plan, buy and measure campaigns across digital devices in four out of five U.S. homes. The company also launched a significant product update in which Roku data, measurement and inventory are now natively available for buyers within the OneView Ad Platform.
Roku’s growing efforts to attract advertisers to its platform and an expanded live channel offering to boost user viewership are expected to drive top-line growth in the near term.
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