Roku Launching Originals: Not Really. Some Day? Not Yet
No word on if a meal will follow Quibi’s quick bites
Roku will commemorate the launch of its first streaming player in 2008 as Streaming Day on May 20 and roll out what it’s calling Roku Originals.
The first 30 Roku Originals will be new to all but the handful of people who subscribed to Quibi, former Disney exec Jeff Katzenberg’s subscription streaming service that aimed to provide quick bites of video content to viewers on mobile devices. After lavishing $1 billion on Hollywood’s finest to produce programming, Quibi went out of business.
For the low, low price of less than $100 million, Roku bought the rights to Quibi’s library of 70 shows, which will appear under the Roku Originals banner, conveniently located just two clicks away from The Roku Channel’s main screen.
Also Read: Roku: It’s Not About Owning More of Our Own Programming
Most of the time, original programming is expensive. The history of television says it can be a good investment.
First came cable. In the early days, cable channels were filled with reruns of shows that had appeared on broadcast. Shows like The Closer, The Shield and Mad Men on AMC generated buzz, higher ad rates and carriage fees for TNT, FX and AMC respectively. Soon every cable network was producing their very own originals.
Then came Netflix, the dominant streaming service. Netflix built up its subscriber base with original series including House of Cards, Stranger Things and The Crown, and movies like Academy Award nominee Mank. This year, Netflix plans to spend $17 billion on programming and its stock keeps rising.
Roku has dipped its toe into fresh, if not original. programming In March it exclusively premiered Cypher, an action drama, and it paid $98 million for This Old House and the company that produces it.
Those shows won’t be Roku Originals, said Sweta Patel, VP of Engagement Growth Marketing at Roku.
Roku last week reported that platform revenue, mostly ad sales rose $101% in the first quarter to $466.5 million. Streaming hours for the ad supported Roku Channel grew twice as fast as the Roku platform overall.
That’s not making the company extravagant.
“The growth of the channel allows us to really have a more creative and expansive sourcing effort around cost effective content,” Patel said.
What will happen after all 70 Quibi shows are made available next year? Is there any development of original content going on at Roku? Any executives hired for a development department?
“I have nothing more to share on that front,” she said, “but we’re always looking at sourcing content that will make sense for the AVOD side of our business.”
Asked about adding original programming on Roku’s first-quarter earnings call, CEO Anthony Wood described a virtuous circle powering the Roku Channel, with more consumers coming to the channel, that increase in viewers increasing ad revenue and that added revenue allowing Roku to spend more on content.
“Content investment is growing commensurate with the revenue,” Wood said, adding that the company is looking to do creative deals. “I think that better quality content is just bringing in more viewers.”
Analyst Steven Cahall of Wells Fargo is bullish on Roku and endorses its frugal programming strategy. With ad revenue and revenue per user expected to rise, “we think Roku is in a better position to go after higher quality content and expect content investments to grow roughly in line with revenue,” Cahall said in a research note.
If you want to think of Roku as primarily a distributor, the history of original programming by distributors is less distinguished.
DirecTV started Freeview in 1999. It later morphed into the 101 Network and the Audience Network before AT&T shut it down in 2020.
It had several original shows including Rogue, a police drama, Hit the Road, a comedy, and Dan Patrick’s Undeniable talk show. It’s better known for making deals that prolonged the life of NBC’s Passions, FX’s Damages and brought it the premiere of the final season of fan favorite Friday Night Lights.
Charter Communications has been offering subscribers Spectrum Originals. Shows have included the return of Mad about You and the police drama LA’s Finest.
What will Roku Originals stand for? The company will have to decide how rich a stream it wants to fish in and how big a fish it wants to cast.
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.