Roku Gets Into the Content Creation Game

Rokus Wants to Make Content for Its 155 Million Customers

Roku (ROKU) wants to be more than just a vehicle for showcasing other companies’ content. The streaming device maker is gearing up to create over 50 original shows during the next two years. The idea is to morph Roku into a leading destination for consumers to access free content.

As it stands, about half of the 155 million people in the US with a Roku device visit the Roku channel. On this channel, Roku serves up free content with ads through more than 200 licensing deals with outside content providers. Roku wants to capitalize on its access to viewers by making new shows in-house.

Roku Takes on Big Competitors

Roku is not disclosing exactly how much it is spending on its content initiative. The company said that it expects costs to be in-line with production costs for basic cable shows. On average, those budgets are a lot lower than what companies like Netflix (NFLX) and WarnerMedia (T) pour into their hit shows.

The streaming device maker has started receiving show proposals from production companies. Roku is mainly looking for shows to reach audiences ages 18 to 49, and is looking for both scripted and unscripted programs. The latter could include reality shows, competitions, and lifestyle programming.

The Importance of Ad Sales

Roku started out making and selling devices which allow viewers to stream a wide variety of content from one platform. However, the company’s ad sales business is taking off. Roku raked in about $1.3 billion from ad sales in 2020, including revenue from its distribution agreements. Companies pay Roku for placement on the platform and on the Roku channel.

During the height of the pandemic, the amount of time people spent streaming content on Roku climbed 65%. That rapid growth has slowed somewhat, but Roku still has a captive audience. The company is hoping that their audience has an appetite for free content.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender