Why is Roku one of the most successful channels?

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Why is Roku one of the most successful channels?

One of the most significant features of the Roku platform is The Roku Channel. The channel aggregates content from other media companies in order to make streaming easy and accessible. Ad-supported streaming is vastly outpacing growth in subscription video, and The Roku Channel has been a big success. While content owners can advertise apps directly on Roku’s platform, the service provides several other benefits responsible for its success.

Better content recommendations

The Roku channel is knowledgeable in regard to its audience’s viewing habits through its advanced algorithm – even more than a stand-alone ad-supported streaming service. Most ad-supported services do not require users to create or log in to an account, which results in generic content recommendations. However, Roku can uniquely track users’ viewing behavior within The Roku Channel, while simultaneously understanding which streaming services users spend most time on, which services are installed on their devices, and what content they search.Using acquired data, Roku can provide better content recommendations for its users. Thus, The Roku Channel is more engaging and entertaining resulting in viewers spending more time streaming.

More targeted ads

Roku knows its viewers’ habits better than most ad-supported streamers and has considerable additional data on its viewers to help target ads. Roku also has other data about its viewers’ households, such as cable subscribers, based on TV Everywhere apps that need. It may even know which ads users have already seen. All this data results in more targeted ads than most ad-supported services.

Third-party streaming apps can offer their ad inventory on Roku’s ad-buying platform, OneView, to sell more targeted ads. However, it is not guaranteed that they will fill their ad inventory. As of now, most third-party ad-supported services cannot offer the same guarantees as Roku Channel. Therefore, ads on The Roku Channel carry higher average prices. Roku shares ad revenue with content providers, and some providers generate more revenue per streaming hour in Roku Channel than on their applications.

Greater efficiency at driving traffic

The final benefit of The Roku Channel is its effectiveness in driving traffic to content. The service from Roku comes preinstalled on Roku devices. That alone provides the accessibility to bring users into the streaming app, as it overcomes a significant struggle for most other ad-supported providers – there is no discovery or installation needed.

Being an aggregator of content means that Roku can bring in a broader audience. It can use its superior content recommendations to funnel users toward appropriate films and series, and that data proves that they would enjoy. This should boost overall engagement for all content providers by keeping viewers in The Roku Channel and making them coming back again and again.

A win-win proposal

Roku offers a win-win proposal for content providers. It can monetize user engagement at a higher rate while generating more hours of engagement. Roku can generate high-margin video ad revenue with very little capital intensity since its only cost for most of its content is the advertising revenue share. Media companies can generate additional income from their content, and in some cases, make more revenue from The Roku Channel than their streaming app on the Roku platform.