Saturday, February 24, 2018

How Roku Survives in a Google & Amazon World

Roku's recent reports about how much revenue they are generating off of advertising has raised a number of questions about how they continue to survive in the market given the presence of two industry giants: Google and Amazon. Their CEO raises a couple of interesting points about what is driving their survival. For one, they don't have the conflict of interest that Amazon and Google have of being a content generator in addition to a hardware/software company. And second, they aren't facing the struggle of trying to fit existing technology into TV (as both Google and Amazon have), they've been solely focused on building technology for TV.

As programmatic advertising on OTT and Connected TVs increases, having Roku as a neutral party increases the opportunity for advertisers to reach consumers across all channels and content points. Giving advertisers the ability to reach as targeted of audiences as they need, across whatever channels  (YouTube, Netflix, Prime, etc.) or content they are viewing, ultimately is the most valuable to advertisers. It also hopefully means more meaningful and relevant advertisements for viewers.

One point that Anthony Wood did not mention is the added complication of the big players also acting as retailers. Roku, as a neutral party, has been able to exist virtually unscathed in a world where at any given time one of the big players could decide to stop carrying the other's products. It's likely that if consumers are looking for a specific product they're going to go to whichever online retailer is carrying it, but when a major competitor has control over how easily they can find it, there's increased potential for risk there.

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