Roku Inc.’s history is rather young. With the rising world of streaming services, Roku has gained in popularity as an essential middle man between consumers, and various streaming/media services. In adapting to everything from streaming boxes for TVs, partnering with television brands to providing a built-in Roku service within smart TVs themselves, Roku has worked to evolve and remain relevant in a rapidly changing industry.
Roku: Timeline and Facts
2002 - Roku (ROKU) - Get Report is founded by Anthony Wood. Born in England, Wood carries a net worth of $2 billion according to Forbes. The founder originally found success in ReplayTV, a type of early DVR system. Fiercely competing with TiVo, Wood sold the company for SonicBlue in 2001. Overall, the company was ill-fated and would go bankrupt. A year later, he formed Roku LLC.
2007 - After working for Netflix (NFLX) - Get Report, Wood managed to bring in Netflix as an investor in Roku, which began working on streaming services. The simple boxes that brough access to streaming services like Netflix to televisions. By operating as an essential middleman, Roku has been able to benefit from the streaming craze by offering a platform to access all manners of streaming services in a “one stop shop”.
2014 - With the rise of smart TVs, Roku pivots into making deals with Chinese television makers Hisense and TCL to produce Roku TVs. The move has helped Roku keep up its relevance in a world where the variety of smart tv’s and platforms like Google (GOOGL) - Get Report Chrome and Amazon (AMZN) - Get Report Fire continue to fight for a bigger piece of the pie. The approach of getting their Roku interface into the mix as the prime streaming system within smart tv’s has grown substantially. You can get Roku TV on a plethora of brands including Sharp, Hisense, TCL and Westinghouse.
2017 - Roku goes public with a valuation of $1.3 billion. According to Forbes, Roku had 41% of market share in 2018.
Since going public, Roku stock has gained 212%. At its peak, the stock was up 540%. Roku’s IPO and stock performance are a bit controversial in the sense that the company doesn’t produce profits. Between 2015 to 2019, Roku has lost $215.68 million, despite revenues growing 253% during that same time.
Some analyst estimates seem to think that 2020 will be the last year of losses before Roku begins to break even. While that may be the case, Roku shares have been a prime example of speculation run wild against the actual financial situation of the business.
What’s Happening in 2020?
Roku shares have not been spared from the market sell-off that has taken place through the last few weeks. Roku shares are down more than 30% over the last month. The actual ramifications for the company’s earnings are difficult to gauge. On one hand, consumers won’t be going out and buying electronics. The global rise of virus concerns could also cause disruption to the supply chain of Roku and its partners. On the other hand, if this virus leads more of us to remain indoors and out of the public forum, the number of hours spent streaming and watching programs could rise substantially.
As investors wait patiently for the shift to profits, the mounting competitors do loom in the background. Apple (APPL) TV is ramping up its efforts with original content. Comcast (CMCSA) - Get Report offers the Xfinity Flex streaming box. Many are looking to see what Comcast does with its Peacock streaming service. Amazon’s Fire TV hasn’t beaten Roku yet, but it continues to be a part of the equation. While Roku’s diversified offering continues to keep it at the top player, it’s hard not to think that all these different alternatives are going to start eating into potential.
Time will tell.