By Ben Popper, The Verge, April 26, 2016
CEO Anthony Wood sees Roku’s future in licensing and advertising
Roku is best known as a maker of a set top box that provides customers with access to streaming service on their TV. But it’s main business is actually licensing its technology to other companies who want to build connected televisions, and selling advertising against streaming content. And it sees Google as its biggest competitor in the race to build the dominant operating system for the future of television.
The company streamed over 5.5 billion hours of video last year, triple what Amazon and Google did, and double Apple, according to Roku CEO Anthony Wood. He was onstage today at the Collision Conference in New Orleans, being interviewed by Verge editor-in-chief Nilay Patel. In the future, Wood said, all smart TVs not made by Samsung will be powered by Roku or Android TV, the two biggest players licensing technology to smart TVs.
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Right now Roku makes about half its money from selling its hardware and half from licensing and ad sales. But it’s media and licensing business is growing at a much faster rate. Right now Wood claims one third of all over-the-top advertising is flowing through Roku’s platform. “TV advertising is still in the stone ages,” he said, referring to traditional broadcast television. Roku, by contrast, can allow marketers to target specific demographics and produce ads that are un-skippable and interactive.
Plus, many of the millennials who make up Roku’s customer base can’t be reached any other way. Just over half of Roku customers don’t have pay tv subscription,” said Wood. He believes Google is behind the recent push to “Unlock the Box”, and isn’t a fan. Roku is available for $50 and can already be authenticated with many big cable companies to put a modern user interface on top of a cable subscription. “The problem the FCC is trying to solve, has already been solved,
” says Wood. He believes the push will add price for consumers, and disproportionately help big companies like Google.