Tedd Cittadine is VP of content distribution at Roku, the streaming device maker that has the biggest U.S. platform for home streaming services. Being on or off Roku can help or hinder a streaming service’s launch considerably, as NBCUniversal’s Peacock and WarnerMedia’s HBO Max learned when they launched without a Roku deal. Cittadine answered some questions from Multichannel News ahead of the launch of Paramount Plus on March 4. The Q&A was edited for length and clarity.
MCN: Does Roku carry CBS All Access? Does that contract carry over to Paramount Plus, or will Paramount Plus need a new, separate deal?
Tedd Cittadine: Roku does carry CBS All Access. We don’t comment on any ongoing deal negotiations, but what I can tell you is that typically the launch of any new service requires a new agreement. Our goal is to offer our customers the broadest content possible.
MCN: As these big media companies have come to Roku with their new, big streaming services, have each one of them sought a unique deal? Has the relationship between big-media company streaming services and Roku become more uniform now that five or six of them have come down the pike?
TC: Given our position as the No. 1 TV streaming platform in America, we are in a unique position to help partners both big and small connect with audiences and grow their business. The biggest change we have seen in the deal landscape in the past 12 months is that major media companies are shifting away from the legacy carriage mindset of diminishing returns where every dollar negotiated was seen as a potential dollar lost given the shrinking size of the traditional TV pie.
The successful streaming services we’ve seen take off over the last year have embraced an abundance mentality that recognizes the incredible growth curve potential for their businesses through strong collaboration with their platform partners in all areas of the business such as user acquisition, customer retention, brand marketing, advertising, and ad tech. This pivot towards focusing on how we grow together has played an important role in the growth of the biggest entrants in 2020 and will continue to shape successful future distribution agreements.
MCN: How much has having these big media companies streaming their most popular and most expensive content helped Roku add users and generate revenue?
TC: We believe that streaming is TV today. With one in three households cutting the cord and great new services creating fantastic content, we are clearly seeing strong shifts in consumer behavior away from traditional TV to streaming. What we saw in 2020 was many of the biggest names in entertainment go all in on streaming and this absolutely helped accelerate the shift away from traditional TV to streaming for consumers. Just looking at our platform helps to bring this shift to life. In 2020 streaming hours on the Roku platform grew by 55% — topping 58 billion hours and we added approximately 14 million active accounts. Consumers now know that whether it is sports or news or blockbuster movies or just comfort TV, they can access all of the content they want on Roku’s platform.
MCN: How is Roku's relationship with programmers and consumers different from the relationship between cable operators and programmers in terms of the difficulty in getting deals done, blackouts affecting customers and fees contributing to higher prices for subscribers and users?
TC: This really speaks to the shift we are seeing from programmers in how they approach distribution deals with streaming platforms. The old cable playbook that was designed to capture maximum portions of a shrinking pie simply does not apply in the current era of streaming where growth is the mindset of the day. Those services that have leaned in and truly partnered with streaming platforms have been the most successful to date.
The other key shift, as you mention, is the consumer. We are relentlessly focused on the value and experience we deliver to the consumer. The deals we negotiate enable us to create a fantastic product at an incredible value. Consumers know this about Roku, and they know that our only business is streaming. And therefore, our only focus is on developing that experience for the user.
MCN: After Paramount Plus, do you think we're done with major streaming service launches? Will there be fewer blackouts now that these relationships are established?
TC: We have just entered the first year of what we believe is the streaming
decade. In the not-too-distant future, we believe a majority of households will have cut the cord. Change is going to be a constant. From the shifting theatrical model to how consumers balance their content viewing habits to navigate the incredible variety and diversity of content available to them, to new innovations in advertising that will unlock even greater consumer choices through AVOD models, the next few years will be incredibly exciting for our industry. I would say we are far
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