TV & Streaming

Roku goes to Hollywood

But breaking into original programming isn’t exactly easy.
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Photo Illustration: Dianna “Mick” McDougall, Photo: Getty Images

· 5 min read

Roku has spent the last 20 years building out a platform through which millions of Americans can watch free streaming television. Now comes the hard part: making the content itself.

A little over a year after the streaming platform acquired a library of original programming from the defunct streamer Quibi, it’s hoping it can win over advertisers with even more original, ad-supported programming that can draw in bigger audiences than licensed content can.

The company will head into the upfront season with its own lineup of content, not just acquired exclusives, for the very first time when it presents to advertisers on May 3. There are dozens of original projects in the works, ranging from scripted comedies and dramas, to reality and nonfiction programming. Roku hopes the lineup will entice advertisers to shift even more of their budgets over to its service, especially when so much streaming content is ad free.

Even with 60+ million active accounts, Roku has realized that scale alone isn’t enough. Content, as the saying goes, is still king.

“We’re bringing our best content to our users for free through the AVOD business model as opposed to putting it behind a paywall, which is what we’re seeing most other folks do,” Roku’s VP of programming Rob Holmes told Marketing Brew. “From an advertiser standpoint, the ability to reach that audience that is no longer available on TV with super high-caliber content as part of our upfront offering, we think it’s something that is going to really stand out.”

Starting with scale

Roku, which sells streaming hardware and software, has long been the method to stream television, not the destination itself. That changed in 2017, when the company created the Roku Channel, a free, ad-supported streaming destination that licensed and aggregated entertainment content and sold advertising against it.

A year later, the company was pulling in more money from its platform business than from hardware sales; as of the end of 2021, Roku said the Roku Channel reached an estimated 80 million people.

It wasn’t until last year that there was an opportunity to try something else: original programming. That development came in the wake of the shutdown of venture-backed, short-form video startup Quibi. Quibi’s original content, much of it never released, was now up for auction at fire-sale prices.

Roku bought more than 75 titles for “significantly less” than $100 million, the Wall Street Journal reported at the time, and has rolled out those shows since. The purchase of Quibi’s library was both “a great deal” and “an opportunity to learn,” Holmes said, but executives hesitated at the time to suggest the acquisition marked a grand shift in strategy.

In hindsight, though, it was the beginning of a recalibration. Last March, Roku purchased the rights of This Old House Ventures, the home-improvement media brand known for the long-running TV series This Old House and Ask This Old House; it also scooped up the rights to stream the linear series Zoey’s Extraordinary Playlist, which was canceled on NBC after two seasons despite acclaim. Late last year, Roku, in partnership with Lionsgate, released Zoey’s Extraordinary Christmas, the first-ever original film from Roku.

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The investment is paying off. In all of 2021, half of the top 10 on-demand titles on the Roku Channel measured by reach were Roku Originals. It’s also continuing to supply content more than a year later. Swimming With Sharks, a scripted drama series created for Quibi, premieres on The Roku Channel April 15.

Importantly, original content is something advertisers are also asking for, said Dan Robbins, Roku’s VP of ad marketing and partner solutions. Making originals directly allows marketers to integrate “with some of Hollywood’s best talent and best programming and production,” Robbins told Marketing Brew.

Brands like This Old House give Roku the ability to facilitate ad opportunities like product placement and integration. “That opportunity is something that you can’t have unless you’re involved in the creation of that content itself,” Holmes said.

Playing nice

Roku sees an opportunity to win over audiences with programming that is compelling as a free offering, but may not have the budget or A-list talent to justify a monthly subscription. Luckily, there’s plenty of content to choose from to license and produce: The service recently released The Newsreader, a drama that won the Australian Academy of Cinema and Television Arts Awards for best drama when it aired on Australian TV, and it recently greenlit Slip, a seven-episode scripted comedy series created, directed by and starring Zoe Lister-Jones.

“There’s a class of content that users [are] very happy to spend time with that’s very different from how they would evaluate, ‘Am I going to spend 15 bucks a month to watch this?’” Holmes said.

It’s a big opportunity. Nearly 128 million people in the US were projected to watch advertising-based video-on-demand (AVOD) in 2021, up 17.6% compared to 2020, according to data from eMarketer. In all, more than half of all digital video viewers in the US are watching ad-supported VOD.

But competition is brewing. Amazon-owned streamer IMDb TV broke into originals in 2020 with the teen drama Alex Rider, and has since built out a considerable originals lineup, while Tubi, the ad-supported free streamer acquired by Fox Corp., broke into originals late last year.

Roku isn’t keen on considering those services as competitors. Instead, the platform, which allows streamers to advertise to Roku users, and which gets a percentage of revenue from subscription video revenue made via Roku devices, positions them all as allies.

“All the same reasons that we’re in a great position to be entering the originals space also makes us a great partner for over 250 different partners who are trying to figure out how to reach the streaming audience,” Holmes said.

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