Will Roku's Push for Original Content Backfire?
It's been three months since Roku (NASDAQ: ROKU) turned heads by acquiring the content catalog of the failed Quibi video service, and now we're starting to see the popular streaming hub firm up its strategy. Roku announced on Wednesday that the 75 premium celebrity-stacked shows and documentaries that it picked up in the Quibi fire sale will be rebranded as Roku Originals. The content will be launched on the Roku Channel, which currently offers free, ad-supported entertainment.
There isn't any material news beyond the rebranding and that the content will logically reside in the expanding breadth of the Roku Channel. A launch date will be announced next month. The press release may seem to be little more than a story to put out on a day when streaming stocks are getting crushed on the heels of a rough earnings report out of the niche's bellwether.
The rub here is that the ascending popularity of Roku's platform in recent years stems largely from its agnosticism. Unlike the tech giants it competes with, which have their own content marketplaces and devices to push, Roku plays nice with thousands of streaming apps. If you can come to terms with the hub's revenue-sharing demands, you have a shot at being seen by the 51.2 million active accounts that Roku is serving. Will the push for proprietary content change that? Will Roku be seen more as a competitor than as a partner? Will ad revenue take a hit as Roku prioritizes its owned content? If you're long Roku you're going to like the answers, so let's take a closer look.
Source Fool.com