Intro

This is Jesse Pujji and today we are breaking down Roku. With all the hype about social media and smartphones, it’s easy to forget that the average American still spends over 5 hours a day watching TV. And while the streaming wars get most headline attention, the battle for the user interface of smart TVs also has billions of dollars at stake. Here, Roku has emerged as an unlikely frontrunner, ahead of Samsung, Google, Amazon and other giants.

To breakdown Roku, I am joined by Joe Frankenfield, Portfolio Manager at Saga Partners. We cover Roku’s history, dive into its income statement, unpack why it is the leading Smart TV platform in the US, and what the future holds for it. Please enjoy this breakdown of Roku.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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Show notes

(00:02:35) - (First question) - What is Roku: its scale and business model

(00:04:37) - The history of Roku, major milestones, and the evolution of streaming

(00:09:04) - The evolution of the content landscape after the inception of Roku’s device 

(00:10:59) - The steps Roku is taking to become the choice provider for consumers

(00:14:10) - A breakdown of Roku’s revenue streams

(00:18:04) - Advertising versus subscription models

(00:18:37) - Mental models for determining the size and scope of the company 

(00:19:48) - How Roku acquires new customers, how marketing differs from old-school cable acquisition methods

(00:21:20) - Reasons why Roku has won the majority market share

(00:28:00) - Roku’s founder Anthony Wood’s importance to the business nowadays

(00:29:04) - How Roku distributes its profits

(00:31:14) - Roku’s acquisitions to date and the reason why the company has not yet been acquired by a bigger player

(00:32:38) - Internal and external factors that could make or break Roku’s  growth expectations over the next 5 years

(00:39:09) - The lessons that can be taken from the Roku story for platform builders and investors

(00:41:37) - Learn more about Roku: Media in the Digital Age | We Now Disrupt this Broadcast | The Business of Media Distribution