With 43 million users and software that comes loaded on one-third of the TVs sold in the US, Roku is powerful. Streaming service on Roku devices means easy access, and for scores of viewers that can make or break their ability to watch the latest releases at home.
Look no further than last month’s Disney+ PVOD debut of “Mulan.” On the film’s opening weekend, 54 percent of US Disney+ streaming hours were viewed on Roku devices, according to Comscore — more than Amazon FireOS, gaming consoles, Apple TV, or other devices combined. That data doesn’t include streaming time on mobile devices or computers, but it suggests that Roku was the number-one way to watch “Mulan” on connected TVs on its opening weekend.
It also suggests something crucial about how the streaming wars are waged in people’s living rooms. As Disney — and Netflix, and WarnerMedia, and NBCUniversal, the list goes on — invest billions in direct-to-consumer streaming, their vertical integrations all lack a key element: none of them actually make the devices that consumers use to access those services.
According to Tedd Cittadine, Roku’s head of content distribution, Disney is an example of “companies that get it.”
“When they launched Disney+, they took over the entire home screen and our UI back in November — it was all branded Disney+,” Cittadine said. “They have a button on every (Roku) remote control, we make tens of millions of those remote controls every year with the Disney+ button on it, it takes you straight to the Disney+ channel. They’re a very active user of our on-platform marketing capabilities to target users that we know, with our data, would be great Disney+ subscribers.”
The way Roku sees it, streaming services will only rise above the ever-growing fray through smart collaboration with device providers. According to Roku, it is the number-one platform used to access streaming services. That kind of reach gives Roku a key role in shaping viewing behavior, one that will become increasingly valuable as studios continue to look toward PVOD and streaming given the current instability for theatrical releases.
Similarly, the release of “Mulan” brought all Roku users a click-through banner on their TV screen that provided seamless access. Streamers can also leverage Roku’s data to hone in on cord-cutters, music listeners, families with kids, and other categories.
Some do not fall in the category of “companies that get it.” Everyone wants to own our eyeballs, and some (all?) studios do not like the fact that Roku is often the last link in the chain. HBO Max launched May 27 and remains unavailable on either devices made by Roku or by its closest competitor, Amazon. As IndieWire reported in August, Roku’s demands on user data and ad inventory stalled negotiations. Together, Roku and Amazon control an estimated 70 percent of the connected TV market, according to 2019 study by Parks Associates.
“There are services that have legacy mindsets, where they want to take all the value for themselves, or not lean into platforms as a partnership,” Cittadine said. “I think the results of the sort of services that have come to market with that mentality — I won’t name any specifics, but you might be able to identify who those may be — I think the results speak for themselves. They don’t have that sort of success that others do.”
NBCUniversal’s Peacock made a soft launch in April and a full rollout in July, all without Roku. In mid-September, following months of negotiations between the two companies, they announced that they’d come to terms. That happened only after NBCU threatened to pull all of its related apps off Roku. The Peacock app is now available for download for Roku users.
While Cittadine said his company is steadfast in its commitment to the mentality of partnership-or-bust, several weeks after his interview Roku announced that its some of its next-generation devices would support Apple Airplay 2 and HomeKit. That creates an opportunity for users to create an end run that allows them to stream HBO Max from their iPhones to their Roku devices. Still, that workaround is an inelegant solution compared to a dedicated button on a remote control, and excludes anyone who doesn’t have a compatible Apple device (sorry, Android users). WarnerMedia declined to comment.
Some mega-conglomerates are trying other ways to close the vertical-integration gap. WarnerMedia doesn’t make streaming devices, but parent company AT&T does boast 92.9 million cell phone subscribers and 18.6 million TV subscribers. They’re served a variety of promotions, including three free months of HBO Max, while NBCU parent Comcast is offering Peacock free to some of its 31.5 million cable and internet subscribers.
In cases where companies don’t have their own direct-to-consumer relationships, partnerships have been essential. T-Mobile offers Netflix and Quibi free, and Verizon throws in Disney+, Hulu, and ESPN+ for some customers. In February, CNBC reported that about 20 percent of Disney+ subscribers came through the distribution partnership with Verizon.
As of August, Disney+ signed up 60.5 million subscribers in its first 10 months. In September, the Roku-less Peacock reported 15 million subscribers.
Numbers for HBO Max, which went online in May, are more complicated. AT&T reported 36.3 million legacy HBO and HBO Max subscribers in July, though it saw just 4.1 million activations of the HBO Max app in its first two months (the discrepancy suggests that most old-school HBO subscribers aren’t using HBO Max).
Apple doesn’t report data for Apple TV+, but Ampere Analysis estimated the service had 33.6 million users in January. At the time, that would have made it the third most popular US streaming service, behind Netflix and Amazon Prime Video — an astonishing feat for a service that launched just three months prior.
Those numbers, combined with Apple’s position as a streaming provider that also ships hundreds of millions of iPhones, iPads, computers, and Apple TV devices annually (with a year of Apple TV+ service for free), suggest that the Roku power struggles will not be easily resolved. In the streaming wars, the only thing more valuable than good content is a wide reach.