In the first quarter of 2022, Roku is showing signs of slowing down, in particular, the slowdown in total net revenue and subscriber growth, which fell below analysts’ estimates. There has also been a significant decline in sales of streaming players due to numerous issues.
With just 1.1 million additional active accounts added, Roku’s total subscribers were 61.3 million in the first quarter. This is slightly below analysts’ expectations. 61.8 million. For context, at the end of 2021the number of Roku accounts exceeded 60 million, up 3.7 million from the fourth quarter.
Roku reported a significant slowdown in total net revenue growth of 28% in the first quarter to $737.7 million. In the first quarter of 2021, the company reported 79% revenue growth.
In addition, Roku reported a 12% drop in streaming player sales compared to last year. The company attributed this to the fact that COVID-19 has distorted business models, as well as the ongoing supply chain crisis and inflation.
“We have delivered solid results in a challenging operating environment and expect to continue to navigate macroeconomic headwinds, including inflationary pressures, geopolitical conflict and supply chain disruptions,” CEO Anthony Wood and CFO Steve Lowden wrote. letter to shareholders.
A restrained outlook based on ongoing macroeconomic headwinds could lead to volatility, similar to that of competitors, in the coming months. In the second quarter, the company expects total net revenue to rise 25% year-over-year to $805 million, lower than the previous quarter. the consensus forecast is $815.7 million..
In addition, despite being the top streaming platform in the US, Canada, and Mexico, the company’s shares fell. 6% for the last week, 20% for the last month and more than 70% for the year.
Much stands in the way of Roku, and new Charter-Comcast venture can compete seriously as a new media aggregator. Charter will contribute $900 million over the course of several years.
However, the competition does not scare Roku. During yesterday’s call, Anthony indicated that the costs associated with streaming would create a hurdle. He said,
“It’s very hard for – especially for a beginner. For example, it’s hard for you to imagine how they will succeed, given the many years we have invested in our platform, as well as our competitors. But beyond that, you just need to amortize that cost over a larger and larger installed base to be competitive. Scale is very important.”
The company believes it will continue to be the number one TV OS seller in the country, no matter how many competitors it has. Anthony added that Roku has been competing with strong companies like Google and Amazon for years, but the reason Roku keeps winning is because it remains successful in both streaming players and smart TVs, not just in one or the other.
In March, the latest version of the TV streaming software was released. Roku OS 11, launched. It focused on adding more personalization to the Roku platform, including but not limited to the new Roku Photo Streams feature.
The Roku channel had a successful quarter for the most part. This quarter, streaming hours increased to 20.9 billion hours, up 1.4 billion from the previous quarter or 14%. Last year, the company’s users viewed 73.2 billion hours of content through Roku’s services.
Earlier this week, Lionsgate and the Roku Channel announced multi-year deal in which the free platform will receive two separate windows in which they will be the exclusive home of upcoming theatrical films until 2024.
This marks a significant win for FAST (Ad-supported Free Streaming Television), advertisers and consumers who have access to more and more free content.
“The ongoing transition to streaming TV continues and we are investing in the significant opportunities that are before us. Our unique assets, including Roku OS, Roku TV, The Roku Channel, and our sophisticated advertising platform, continue to enable us to build on our leadership in the coming years. We continue to be excited about this opportunity as more content, viewers and advertisers move to TV streaming.”
The company continues to expand The Roku Channel’s content library. Roku wrote in its shareholder letter that it previously entered into a licensing agreement with A+E Networks and also launched Discovery+ through premium subscriptions on the Roku channel, bringing viewers over 70,000 episodes.
The letter added that on May 3, Roku will show advertisers new content coming to the service as well as promotional product offerings at the first in-person Roku Upfront event. New and upcoming games include Honest Renovation, a home renovation series hosted by Jessica Alba and Lizzie Mathis; To Paris for Love: A Romantic Comedy and STRANGE: Al Yankovic’s Strange Case starring Daniel Radcliffe.
Credit: techcrunch.com /