Your browser is not Javascript enable or you have turn it off. We recommend you to activate for better security reasonRoku wants to make its TV platform a "next-generation ad platform" - FlatpanelsHD

Roku wants to make its TV platform a "next-generation ad platform"

24 Jul 2018 | Rasmus Larsen |

Roku is not making profits selling its hardware, the company CEO admitted to The Verge. Instead the company is “building out a big, next-generation TV ad platform” to monetize Roku users.

TV ads in the streaming era

Subscribers to cable TV bundles and other types of linear TV are accustomed to seeing ads, despite paying significant amounts of money for service. Streaming TV is a little different in many areas but several companies are eyeing opportunities to continue this practice.

Roku is one of them. The company is selling affordable Roku-branded media streaming boxes as well as licensing its operating system to TV manufacturers. This gives the company control over the user interface on tons of TVs out there, and it is planning to use that virtual real estate to show targeted ads.

- “We don’t really make money... we certainly don’t make enough money to support our engineering organization and our operations and the cost of money to run the Roku service,” CEO Anthony Wood told The Verge in an interview. “That’s not paid for by the hardware. That’s paid for by our ad and content business.”

Roku is one of the leading TV platforms in the US and it is using its muscle to make some smaller app developers give up 30 percent of their ad inventory, if they want to be promoted on the Roku platform, in order to sell its own targeted ads.

- “We get a share of their ad inventory. We take all that ad inventory, we aggregate it, and then we sell targeted ads,” Wood explained. “Consumers are shifting to streaming. And as they shift to streaming, advertisers are following them. Building out a big, next-generation TV ad platform is an important part of Roku business.”


 Roku channel


Leads Google in the TV space

It is a notable concept; selling hardware close to cost and then monetizing TV viewers through ads. So far, it has allowed Roku to race past Google in the TV space where Google is competing through its Chromecast plus Android TV hardware bet.

However, serving targeted ads also means that Roku is collecting a lot of data on your personal viewing habits. One of the ways is to use ACR that analyzes all images on screen in real time – even your private vacation photos.

With this strategy, Roku is taking a page out of Google’s playbook whereas other players in the space are taking a different approach. Rather than ads, players such as Apple, Microsoft and Sony are selling hardware at a higher price while ensuring a continuous income stream by selling apps and games through their respective app stores on Apple TV, Xbox, and PlayStation. Makers of Smart TVs on the other hand are seemingly caught in a limbo where they try to charge full price for the TV hardware and then use questionable methods to monetize its users by allowing third parties to collect personal data via ACR.

Roku is planning to take even more control of the user experience through its free ad-sponsored Roku Channel where it curates content. The company has just announced that the initiative is expanding to Canada over the coming weeks. The free app is also being rolled out on other companies’ devices such as Samsung Smart TVs.

- Source: The Verge, Roku



Latest news

Google TV - Basic TV

Google TV can be set up as a 'Dumb TV'

25 Feb 2021 | Rasmus Larsen |
Paramount+

Paramount+ launches March 4 with series & movies in up to 4K Dolby Vision

25 Feb 2021 | Rasmus Larsen |
Amazon Luna

Amazon Luna game streaming is now in open beta on FireTV

24 Feb 2021 | Rasmus Larsen |
Samsung TVs

Samsung tops global TV market for 15th consecutive year

24 Feb 2021 | Rasmus Larsen |
Sony PS VR

Sony confirms development of 'next-generation VR system' for PS5

24 Feb 2021 | Rasmus Larsen |
Powered by webOS TV

LG says that over 20 TV makers will be using its webOS platform

24 Feb 2021 | Rasmus Larsen |
Samsung Q80A QLED LCD TV

Samsung reveals US pricing for 2021 Q80A, Q70A, Q60A & The Frame TVs

23 Feb 2021 | Rasmus Larsen |
Disney+ Star

Disney+ launches Star in Australia, Europe, Canada & more countries

23 Feb 2021 | Rasmus Larsen |