Roku Inc (NASDAQ: ROKU) announced its next move to expand on its ad-supported content strategy on Monday. On August 13th, it said, the Roku Channel will premiere another 23 “originals” that it bought from Quibi earlier this year.
As the California-based company adds new shows, the list of advertisers on its platforms continue to grow, making up a prominent source of its revenue, and setting it up to practice “superior pricing power over time,” said Evercore ISI analysts.
Roku bought rights to over 75 Quibi shows
Roku secured rights to over 75 Quibi shows in January as the streaming service called it quits after failing to bring enough subscribers to the platform despite the pandemic that restricted people to their homes. The first set of 30 shows already debuted on the Roku Channel in May.
The new shows added to Roku’s list of “originals” include “Eye Candy” and “What Happens in Hollywood”, which would be available to the audience in the United Kingdom, the U.S. and Canada from this Friday.
Comments from Needham analysts
According to Needham analysts, Roku wants to build on its ad-supported video-on-demand business model without hurting gross margins from content creation. In a note last week, the analysts said:
“The Roku Channel continues to broaden its reach by growing niches. Total streaming hours doubled at the Roku Channel in the second quarter of 2021, driven by its flywheel of creating new Roku originals, which leads to more viewing hours, which attracts new advertisers, which drives higher ad revenues, which Roku invests into new original content, etc.”
Cathie Wood buys Roku shares after Q2 results
The news comes only a week after Roku reported market-beating quarterly results for its fiscal second quarter.
Streaming hours, however, came in a billion less than the prior quarter. CEO Anthony Wood attributed the decline to people spending less time indoors in recent months as the COVID-19 restrictions started to ease. Nonetheless, Roku is outperforming the overall TV industry, the chief executive added.
The stock tanked a little under 10% after the earnings report – a dip that made billionaire investor Cathie Wood buy roughly $19 million of Roku shares.
The post Roku Originals to premiere another 23 Quibi shows on August 13th appeared first on Invezz.
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Wajeeh Khan
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