Why Roku is the Amazon of streaming

Roku (ROKU) is an outperformer in 2020, and is becoming the Amazon (AMZN) of streaming. With the Pandemic hitting, Roku was able to capitalize on their 148% growth, leading to their accelerating demand.

As a result, revenue increased 60% year over year and for the first time the company has turned to profitability. We know Roku as one of the undisputed leaders in the streaming industry and with their recent announcements illustrating their dominance, I expect Roku to continue leading the industry.

Roku is becoming bigger than Amazon

Over the past several years, Roku has been playing leapfrog with tech giant Amazon and its streaming video platform, Fire TV. Early last year, the e-commerce behemoth announced that it had topped 40 million monthly active users, jumping ahead of the 37 million users on Roku’s rolls to close out 2019.

However, 2020 has been a turning point in many ways, and Roku’s growth has been accelerating just as Fire TV’s growth has begun to slow. Amazon recently said its user base had climbed to 50 million in 2020, an increase of 25% year over year. Not to be outdone, Roku released figures this week that show it has taken the lead with 51.2 million active accounts, up more than 38%. Not only that, but Roku users are highly engaged, spending more than 3.5 hours on the platform per day.

Not many companies can go head-to-head with Amazon and beat the company at its own game. Add Roku to that list.

Roku acquires Quibi content

After weeks of rumor and speculation, Roku announced Friday that it had acquired the global distribution rights to content from Quibi, the ill-fated, smartphone-focused streaming service that shuttered in October, just six months after its debut. 

Roku said it acquired more than 75 premium shows and documentaries from Quibi’s playlist, which will now be shown exclusively on The Roku Channel, the company’s flagship ad-supported streaming channel.

This includes “Emmy award-winning scripted series, alternative and reality programming and documentaries featuring stars such as Idris Elba, Kevin Hart, Liam Hemsworth, Anna Kendrick, Nicole Richie, Chrissy Teigen, and Lena Waithe,” according to the press release. Roku also said that more than a dozen previously un-aired Quibi programs would make their debut on The Roku Channel.

This is the latest move to bring more premium content to The Roku Channel. This strategy is paying off, as viewer growth for the channel is growing faster than overall user growth. In the fourth quarter, The Roku Channel reached an estimated 61.8 million viewers, doubling year over year. 

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Jay Lorrence
Investor of 12 years and Managing Editor of Money Midnight, a news outlet focused on highly profitable investment ideas and bold underground research.
Articles: 232

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