AGB 2020.3 - Roku (ROKU)

Neutrality Wins Until Scale is Achieved

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Roku

When we analyze the evolution of video content consumption, we separate it into two distinct categories: on demand and linear. Most of the improvement so far has happened in on demand.

Consumers looking to gain access to linear content is straight forward. Get content over the air or through a cable provider. On demand content required a bit more work from the consumer. That meant buying a media player, going to a physical location in advance to buy or rent content, and then returning the content. On demand content was available through a cable provider through PPV but the prices were steep.

Then Netflix, YouTube, Prime Video, Hulu and others changed the game by bringing on demand content over Internet for a subscription fee or watching a few ads. At first, it wasn’t the best experience because Internet enabled streaming video was mainly viewed on phones, tablets and computers.

That all changed when the dedicated s…