November, 2020

Should Roku be worried?

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Roku (ROKU)

Last year we highlighted a major opportunity for Roku: Streaming content accounted for 29% of total video watch time, but only captured 3% of television advertising spend.

We knew this gap would close…and some suggest the pandemic fanned the flames

Last quarter, Roku continued to capture this shifting ad spend. Platform revenue (ads) increased +46% YoY, now comprising ~68% of its revenue.

BUT LikeFolio data suggests new user growth is slowing. 

Roku consumer demand chart

Purchase Intent in 20Q3 increased +4% QoQ, +10% YoY. This is a slowdown from 20Q2, and the current quarter pace continues to fall.

Note: If Roku reports a significant increase in spend from advertisers that boycotted social media in a similar vein to Pinterest, it could surprise investors. 

Landon talked about this today on the TD Ameritrade Network.


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