All right, well streaming services like Roku, that
platform today announced that it has plans to develop more
than 50 original shows over the next two years as
it tries to become an entertainment giant in an increasingly
competitive sector. Rocco is aiming to make its platform
a destination for free content while also looking to better
monetize the 155 million people who have Rocca devices in
their homes. Rock who declined to say how much
money it will invest in its slate of programming but
did say that its budget would be in par or
on par with those of basic cable shows. Taking
to look at what Roku shares are right now.
They're under pressure a bit this afternoon, but they
did spike this morning on the announcement. Joining us
now is Shelly Kramer, co founder and lead analyst
at industry analysis, an advisory firm future. Um
, a research Shelly, thank you so much for
being here Rocco down, I think that's just all
there, 3/10 of a percent. Want to get
your thoughts though on Rocco's announcement, could this give
them a competitive edge in this really increasingly competitive space
? I think. Absolutely. So I think that
, you know, the thing about Rock, Ooh
, that is so interesting is that, you know
, this is not a new player. Rock has
long been the biggest player in the streaming hub business
powering more smart TVs and stream streaming boxes in the
US than its competitors. So it has an established
foothold already in. Consumer's homes and uh, you
know, the company built its business on selling those
streaming devices and it now sells ads in the streaming
apps that it's care that it carries its made deals
with media companies that have been profitable for it.
But the transition here from hardware to adding a software
component by by way of original content, I think
it's smart and it's all about the Benjamins, it
certainly seems like a smart position to take. I
just wonder the timing is Rocco getting in kind of
late in the game, especially when it comes to
original content, when you've got players like amazon and
netflix who have really taken the crown there, you
know, I don't think so, of course,
we're all familiar with the major players in the space
. Netflix with its huge subscriber base and in this
space scale defined success in streaming Ok, but size
isn't everything, regardless of what we may say,
content also matters. And on that front it's become
a real competition between netflix and Disney Plus and Prime
video. Um and then we also have HBO in
the mix. And HBO is known at HBO max
is known as kind of the it's streamer because of
the great quality of content that they're known for producing
. You know, I noted when I was prepping
for the show that netflix had more Emmy nominations last
year than any other platform. But HBO won more
Emmys. So quality content is exceptional, there's always
going to be a market for that, How will
this play out for Roku? Well, you know
free is compelling to a whole lot of people and
the thing about HBO max and netflix and amazon prime
, they're not free. So I think that there
really is an opportunity here for Roku to work even
with its existing customer base and come forward with an
offering that's attractive. Rocco says um that it's show
budget won't release exactly what that is, but it
says that it's comparable to basic cable shows. Um
I would imagine and I think everyone is on the
same page here thinking that's significantly less than what netflix
and HBO max pay for their marquee shows. Um
is that a smart move, can you get quality
to your point original is kind of king, but
quality original is a little bit above that, Can
they get to that quality original with these kind of
smaller budgets, you know, do they want to
, you know what I'm saying? I mean,
you know, we've got for instance, Apple Tv
is one of the smallest of the streaming services with
just 34 million subscribers and it's also got the smallest
library of content, but that's impressive content. You've
got standout shows like ted Lasso in the morning show
and for all mankind. Right. Um but I
think the thing about what Roku is doing is you
know, again, this is free content, you
know, one of the things I noticed that Raku
acquired the company that produces this old house that wildly
famous, you know, show that, you know
, now is in reruns, right? But there's
an audience for that and I think there's an audience
and when I think about all of the crazy shows
that are out there, you know, like that
you find yourself watching on some random day, uh
you know, I was on vacation once watching naked
and afraid and I'm thinking why, I mean,
this is like such bad content, but I think
again, three speaks to a lot of people and
I don't and I don't think that can be overlooked
and you know what, there's no accounting for taste
, you like what you like, I like what
I like, you're happy to pay for it.
I want it for free. I got really quickly
, I've only got like 15 or 20 seconds here
, but I want to get your thoughts on the
stock right now. It's down kind of, you
know, after this news, I think down around
3/10 of a percent. But can it pick up
momentum as this content potentially starts to roll out?
Well, I don't see why it won't. And
here's why today I said earlier, this is all
about the Benjamins today. Um Raku sells less than
30% of ads when viewers watch content in other apps
that are on its platform, but it sells 100%
of the ads when viewers watch on its platform.
So these 50 pieces of original content supported by ads
, you know, again, it's all about the
money, it's all about the revenue potential. And
I see this as really being an upside for raku
. It'll be interesting to watch this kind of develop
and maybe even watch some of their shows. Thank
you so much for being here, Shelly Kramer,
co founder and lead analyst at Future Research.