Tedd Cittadine is vice president 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 launch considerably, as NBCUniversal’s Peacock and WarnerMedia’s HBO Max learned when they launched without a Roku deal. Cittadine answered some questions for Next TV ahead of the launch of Paramount Plus on March 4. The Q&A was edited for length and clarity.
Does Roku carry CBS All Access? Does that contract carry over to Paramount Plus, or will Paramount Plus need a new, separate deal?
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.
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?
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.
Read Also: Roku's Tedd Cittadine: Gatekeeper to Streaming Success
How does whether a service is ad free, ad supported or a hybrid affect their relationship with Roku?
The benefit of being an independent platform is that we are thrilled to work with all content publishers, and each of them can determine the business model that is most appropriate for them. Each individual streaming service has unique opportunities for growth that Roku can help them achieve. For example, we’re able to help SVOD services identify and reach their ideal audience using our industry-leading performance-based advertising technology, which has been a major growth accelerant for many services. Disney Plus for example had more people watch the service on Mulan’s opening weekend on the Roku platform than on every other streaming platform combined. Additionally, the premium subscriptions business on The Roku Channel has helped partners like Starz and Showtime significantly grow their subscriber bases with offerings like extended free trials. On the AVOD side we have built an incredibly advanced ad tech platform and insights business designed to help our partners fully maximize the monetization of their channels while also driving audience discovery. Ultimately, we believe all content will be streamed and whether it is via an SVOD, TVOD or AVOD or some new form, our platform was tailor built to support its growth.
How much has having these big media companies streaming their most popular and most expensive content helped Roku add users and generate revenue?
We believe that streaming is TV today. With 1 in 3 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. Let me give you two examples to bring this to life. Households with more than 20 million people streamed election news on Roku. We also saw a 44% increase in streaming hours across all streaming channels that carried the Super Bowl. Conviva just reported that more people streamed the Super Bowl on the Roku platform than on the next two closest streaming platforms combined. What we are seeing with the Super Bowl data and with the election data is that the usual “hooks” for traditional TV, namely news and sports, are no longer holding audiences to traditional pay TV the way it once did. That coupled with the incredible array of amazing content coming from our partners and the investments we make in the user experience have all contributed to the growth of streaming, a growth that we believe represents a secular trend that will only continue in the year’s ahead.
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?
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.
Can a streaming service be successful without having a deal with Roku? Without Amazon? Without Apple?
Roku has grown to become the No. 1 TV streaming platform in America because of our focus on delivering an incredible user experience. Streaming is our entire business and that relentless focus has enabled Roku to help shape the foundation of the streaming decade we are now in. In 2020 we added approximately 14 million active accounts reaching 51.2 million by year's end and our users continue to stream more and more each year. We can help streaming services be successful, and we are focused on driving mutually beneficial deals with our partners. We know that when they grow, we grow and that is our focus as a business.
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?
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 from “done.”
