Roku Waved the White Flag
It’s been years since I last wrote about Roku. The lack of discussion reflected the company having lost relevancy in video streaming despite reporting continued growth in customers and watch time. Thanks to Fox’s $22 billion acquisition offer for Roku, founder and CEO Anthony Wood received an honorable discharge from the market with some dignity intact. The deal total is a far cry, however from the $100+ billion market cap that Roku traded at a few years ago.
The promise that had been found with Roku’s business model involved coming up with a TV OS that advertisers wouldn’t be able to resist. As the mass market shifted from linear TV to streaming, Roku would capitalize on dislocation in video advertising. The shift from linear to streaming would push consumers into paid video silos void of advertising. This would leave advertisers in a bind, unable to reach viewers. Advertisers, not video viewers, would serve as Roku’s customers. By working with TV set makers to get its OS on as many TVs as possible, Roku could also chase ancillary revenue streams such as earning revenue share for selling paid video bundles.
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