Roku released its fourth quarter results today and in doing so helped to explain the value in diversifying the company’s product in the way that it has recently.
Overall, 2018 proved to be a good year for the company who now claims to have 27 million active accounts, representing 7.8 million more than it had the year before. In the fourth quarter alone, Roku saw over three million accounts added.
What’s more, Roku player sales were up more than 30-percent year-over-year.
While there’s no doubting that at the hardware level business is booming right now for Roku, it is the experience-based part of the company’s product that seems to be leading the way in terms of revenue. As platform revenue came in at $151 million for the fourth quarter compared to just over $124 million for revenue related to players.
An even clearer example of the difference can be seen in the year-over-year change. As while player revenue increased 21-percent year-over-year, platform revenue was up 77-percent year-over-year.
It is results like this that highlight just how much revenue can be accumulated post-product sales by a company like Roku and likewise, how much revenue might amplify if the Roku ecosystem was to move beyond the company’s own hardware products - which is exactly what has happened during the last 18 months, and is still happening now.
Roku first launched its “The Roku Channel” service in late 2017 which at the time offered free content to owners of a Roku device. However, the big change came shortly afterwards when Roku opened up the service, for the first time, to those who don’t own a Roku device through the web version of the service.
Since then, Roku has made it abundantly clear that the expansion is not stopping there as by the end of January The Roku Channel also become available through the iOS app and the Android app is scheduled to receive a similar update any day now.
In addition to this, The Roku Channel itself has also been expanding as last month saw the activation of a new premium subscription feature that follows in the footsteps of Amazon’s “Channels” service by allowing users to subscribe to various other and high-profile subscriptions through Roku. This is another feature that will become available to non-Roku device owners through the web and Android app.
Moves which have clearer painted the picture that in spite of Roku hardware doing and selling better than ever, the company’s ambitions to build out the platform stretch far beyond its own over-the-counter solutions. Roku's platform is now bigger than the sum of its hardware products. As the platform continues to grow as it has been, the user base will grow and so will the platform revenue - irrespective of whether any Roku devices are sold along the way.
As part of today’s announcement Roku took a moment to point some of the other major milestones that took place, such as how it estimates “nearly 1 in 5 U.S. TV households now use the Roku platform to stream at least a portion of their TV viewing” and that “more than one in four smart TVs sold in the U.S. were Roku TVs.” This is in addition to how the company expects to “reach $1 billion in revenue in 2019.”
If those figures were not impressive enough, then Roku also pointed out 24 billion hours of streaming occurred via its platform in 2018. 7.3 billion hours of that came in the fourth quarter alone and that’s not far off double the number (4.3 billion) of streaming hours the company announced for Q4, 2017.