The real Roku profits lie in charging streaming channels for access to Roku customers I believe; is the viewing data (which you can turn off at the per-device level) worth that much?
I think it's not just the data. At this point they're selling access to you.
If you're Roku and you're the largest in the market, a company like YouTube or NBC or HBO needs to be on your devices. So you ask for X% of the profits and Y% of the ads and you start skimming off that.
Many reports have said that Roku wants 20% of streaming charges and 30% of the ad buys. If HBO is charging people $15/mo, that's $3 per HBO subscriber per month. For apps like Discovery or others with ads, you're potentially becoming the largest television advertising powerhouse ever. Imagine 10 years in the future if Roku is 80% of the streaming box market and they're selling 30% of the ads across all the TV you watch. Imagine if they're getting 20% of all the pay-TV revenue.
Right now, Netflix has been too big for companies like Roku to put pressure on. However, Netflix has been losing ground as more competitors pop up in the market. I'm not saying that Netflix is vulnerable to pressure now, but as more and more consumers get Peacock, HBO Max, Apple TV+, Amazon Prime Video, Disney+, etc., there's the possibility that Roku could also start pressuring Netflix.
Historically, Netflix has been the company that pressured the device makers. If your device couldn't play Netflix, no one would buy it. I think that's still the case today, but 10 years from now Netflix will be facing off against an entire industry of streaming companies and it's possible that some households become HBO Max/Prime households (or the like). If that happens, Roku will start having power over Netflix.
Netflix needs a pivot to stay relevant. Right now it looks like self programming, but everyone else can do that, and Disney can do it better. They'll be around, probably more like Hallmark channel than the big name they are now.
If you're Roku and you're the largest in the market, a company like YouTube or NBC or HBO needs to be on your devices. So you ask for X% of the profits and Y% of the ads and you start skimming off that.
Many reports have said that Roku wants 20% of streaming charges and 30% of the ad buys. If HBO is charging people $15/mo, that's $3 per HBO subscriber per month. For apps like Discovery or others with ads, you're potentially becoming the largest television advertising powerhouse ever. Imagine 10 years in the future if Roku is 80% of the streaming box market and they're selling 30% of the ads across all the TV you watch. Imagine if they're getting 20% of all the pay-TV revenue.
Right now, Netflix has been too big for companies like Roku to put pressure on. However, Netflix has been losing ground as more competitors pop up in the market. I'm not saying that Netflix is vulnerable to pressure now, but as more and more consumers get Peacock, HBO Max, Apple TV+, Amazon Prime Video, Disney+, etc., there's the possibility that Roku could also start pressuring Netflix.
Historically, Netflix has been the company that pressured the device makers. If your device couldn't play Netflix, no one would buy it. I think that's still the case today, but 10 years from now Netflix will be facing off against an entire industry of streaming companies and it's possible that some households become HBO Max/Prime households (or the like). If that happens, Roku will start having power over Netflix.