Roku Aims to Expand Its Audience for Original Programming

Roku, the streaming media platform with more than 63 million U.S. accounts, has taken the plunge into exclusive programming this past year. In addition to purchasing the Quibi library and spending a reported $97.8 million to buy the home improvement franchise This Old House Ventures, Roku Originals has funded the Funny or Die production “Weird: The Al Yankovic Story,” budgeted at $12 million. Roku Originals has also produced a movie adaptation of NBC’s canceled “Zoey’s Extraordinary Playlist” and greenlit fresh seasons of Quibi’s Kevin Hart-starrer “Die Hart” as well as the remodeling series “Murder House Flip.”

Roku has signed deals for unscripted content from Martha Stewart, Jessica Alba and Emeril Lagasse, and has plans for a September telecast of “Heathers: The Musical” from London’s West End. But “Weird” is the show The New York Times calls Roku’s “most ambitious programming move.” The film, which stars Daniel Radcliffe, will premiere in September at the Toronto International Film Festival and be made available for free on Roku in November.

“The film is part of Roku’s effort to persuade those who use the device to access paid apps like Netflix and Disney+ to spend more time perusing the free content offered on the Roku Channel, which now includes 40,000 movies and television shows and 150 linear channels,” says NYT, explaining that “keeping viewers on the platform longer is a way to bolster its advertising revenue for a business that has come to rely more heavily on ad spending and content distribution than device sales.”

At present, device sales account for only around 12 percent of Roku’s bottom line, according to NYT, which concludes that viewing hours on the Roku Channel “is imperative” to the company’s success.

NYT pegs Roku’s original programming budget at about $1 billion this year, “far beneath Netflix’s $17 billion content budget or the $30 billion Disney will spend across all its divisions for 2022.” In a recent investor note, MoffettNathanson said Roku faces a “three-sided war,” fighting Amazon and Google on the connected TV side, Netflix, Disney, HBO and others for ad dollars, and “nearly every streaming platform under the sun” for audience.

The Verge notes that one trick up Roku’s sleeve is to selling its “prime real estate” by plastering other streamers’ logos on the actuator buttons that control Roku remote controls. “Even better, those buttons will only launch that service,” The Verge notes, calling Roku “an advertising company in streamer’s clothing.”

“Basically, Roku’s best ROI may be the Netflix-red and Disney-blue paint its suppliers buy,” The Verge quips. It will have to come up with something. As Variety noted, Roku fell short of Q2 earnings goals as streaming hours fell from the prior quarter.

Related:
The Roku Channel Adds 14 Linear Channels, Expanding Its Local News Offering, TechCrunch, 8/16/22
Paramount+ Joins the Roku Channel’s Premium Subscriptions Lineup, Roku Newsroom, 8/3/22
Roku Introduces Three New Roku TV Partners in Mexico: Aiwa, Daewoo, and Sansui, Business Wire, 8/18/22
‘The Great American Baking Show’ Set for Roku Channel Debut in 2023, Deadline, 8/17/22
‘Rich Eisen Show’ Jumps to Roku from Peacock, Variety, 8/16/22
Discovery+ Is First Roku Premium Sub with Ad-Supported Tier, ETCentric, 5/22/22