Why Roku Is Like a Cable Network

March 22, 2018

Roku CEO and Founder Anthony Wood has been reinventing the way we watch TV for years.

Now he’s in the process of changing things yet again.

“Our goal is to build the best TV in the world...In the modern world, that means a TV that’s connected to other devices in your home,” said Wood.

In January, the company unveiled plans to create “Roku Connect,” software that will help speakers and TVs connect seamlessly, and a voice-controlled Roku Entertainment Assistant.

“Extending our ecosystem around the home is a way to increase engagement, increase touchpoints with our products.”

Wood’s been revolutionizing the industry for decades. He invented the DVR and founded ReplayTV in the late 1990s.

In 2007, he led a project at Netflix -- just a DVD-shipping company at the time -- to create hardware that would stream content. In the end, Netflix decided against the strategy, and the project spun out into its own company: Roku.

Today, Roku has expanded beyond its box into content distribution and streaming with great success.

Its business model now includes revenue from advertising and licensing deals with TV manufacturers.

In 2017, the company launched the Roku Channel, a free, ad-supported streaming platform. And on Tuesday, it said it will start embedding that channel in smart Samsung TVs later this year.

Roku now has over 19 million active accounts, which would make it “the third biggest cable operator in the country, just behind Comcast and AT&T,” Wood said.

Though its user base lags far behind Netflix’s 118 million paid subscribers, Wood believes the company “is competing very effectively.”

The fact that the platform is neutral and allows rival companies like Netflix, Amazon Instant Video, and Google Play to live under the same roof gives it an edge, says Wood.

Still investors may be concerned about the competition.

Roku went public on the Nasdaq at the end of September at a price of $18 a share. It rose as high as $58.80 in December, but has lost about 40 percent since.

For the full interview, click here.