Roku CEO Anthony Wood said the company is “essential” to the rollout of any major streaming service and said it was “an important part” of Disney racking up 26.5 million subscribers just six weeks after it launched.
The top exec, who founded the streaming specialist, said the Disney+ launch is “an important sign that the streaming decade has really started.” Disney+ debuted last November 12, on the heels of Apple TV+ going live on November 1. Two major services, Peacock and HBO Max, are due in the spring, part of a wave of attempts to slow the momentum of Netflix and other incumbents. When Disney reported its quarterly numbers last week, it revealed the streaming tally through December 31 and said Disney+ rose to 28.6 million subscribers through last Monday.
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Wood’s comments came during the company’s conference call with analysts to discuss fourth-quarter results. Prior to the call, the company announced numbers that beat Wall Street estimates, noting it reached 36.9 million active accounts by the end of 2019.
Wood said the company’s “hat is off” to Disney for its roaring start “in just three months.” When an analyst corrected him to note that the launch tally came after just six weeks, he quipped, “Even more impressive.”
Although they were asked numerous times for specific financials related to the launch of Disney+, executives declined to offer any, citing the confidential nature of revenue-sharing arrangements. CFO Steve Louden would say only that there were “dollars in the quarter and dollars in the  outlook related to services like Disney+ or Apple or others.”
Wood was asked about Roku’s likely role in the debut of NBCUniversal’s Peacock in April. “We’re an essential partner for any streaming service trying to build an audience in the United States, so I think it would be natural to assume that there will be some sort of deal done there,” he said. “But I don’t think we’ve announced anything yet.”
Roku sees its “platform revenue” — the line item reflecting revenue sharing from streaming services, both new and continuing — would take up about three-quarters of total revenue in 2020, up from about two-thirds today. Total revenue should reach $1.6 billion in 2020, the company forecasts, up from roughly $1.1 billion last year.
In addition to video ads, the company has a lot of other ways to drive attention for new services, executives said. Disney racked up big numbers quickly because it “leaned into the tools” that Roku offers, Wood said.
“This is not your linear tune-in form of old linear channel marketing,” added Scott Rosenberg, SVP and GM of Roku’s platform business. “We’ve got data that helps us predict who’s likely to be the next CBS All Access, the next Disney+, the next Apple TV+ viewer. And we deploy those capabilities in partnership with content providers to help them do better, faster customer acquisition and retention.”
Wood also made his first public comments about a carriage snag with Fox just before the Super Bowl. He emphasized key differences between streaming and traditional TV delivery.
“We’ve built a lot of capabilities into our platform,” he said. “When [programmers] succeed, we succeed. We participate in some of that upside that we helped create. In terms of deals, we renew thousands of deals a year and generally we’re able to reach mutually agreeable terms. It’s not a zero-sum game.”
As to relations with Fox after the dust-up, Wood noted twice during the call how much he enjoyed watching Super Bowl LIV in 4K via Roku.
The Fox fight does not portend a repeat of carriage negotiations of traditional TV, which have grown increasingly fractious, Wood maintained. “In the pay-TV world, there was a fixed-size bill. You’d spend, say, $1,000 a year on a bundle. And then there would be a fight between the distributor and the networks over how to split that bill,” he said. “In the case of streaming, it’s a new business for everyone. It’s just a different dynamic. The dynamic is that we’re trying to help build businesses.”
Another question lobbed at management was about competition from internet-based bundles like Flex, Comcast’s broadband offering, which aggregates multiple streaming apps. Customers of Comcast’s Xfinity broadband service get Flex for free, which some analysts see as a way of it taking share from streaming enablers like Roku.
“Our customers love the Roku experience,” Wood said, noting that price is only one of many considerations. “We just don’t see competing with traditional cable distributors as a big part of our competitive dynamic.” He added, “We also have the Xfinity app on Roku. I have it on my Roku and that’s what I use to watch TV sometimes.”
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