Roku Inc. reported a 58% increase in revenue during the holiday quarter, as the streaming-media service continued to benefit from customers watching more entertainment while stuck at home during the COVID-19 pandemic. “We think the pandemic has accelerated, and permanently changed the curve on, the shift to streaming,” Roku Chief Executive Anthony Wood said Thursday.
Consumption of at-home streaming video entertainment has boomed during the pandemic as consumers have diverted more of their time and money to platforms such as Roku, the leading streaming-video competitor, with about 30% of the market, according to Strategy Analytics.
“It was all aspects of the company hitting at once,” Scott Rosenberg, SVP and GM of Roku’s platform business, said about the better-than-expected Q4 results in an interview with reporters.
Roku’s low-margin player segment, which includes its streaming-media devices, turned in revenue of $178.7 million. That was up 18% but was a lower growth rate than the year-earlier period, which the company attributed to COVID restrictions that depressed holiday shopping. Roku maintains low margins (near zero) for its player business, which it uses to grow active accounts and fuel sales in the platform business.
For the full year, streaming hours on Roku hit a record 58.7 billion, increased by 55%. In Q4, streaming hours by Roku users hit an all-time high of 17 billion hours (also up 55%). Last month, as part of bulking up its free, ad-supported Roku Channel lineup, the company inked a deal to acquire global rights to more than 75 of Quibi’s original shows. That came after the startup led by Jeffrey Katzenberg and Meg Whitman folded six months after launch. Roku says it plans to add the Quibi shows, representing several hundred hours of content, on the Roku Channel in 2021. The company paid “significantly” less than $100 million under the deal with Quibi, a source familiar with the deal said.