Roku is a pretty hefty company the way it is -- but if history is any indication, it could be getting a whole lot bigger. In a new report from CNBC, the streaming hardware company is growing much faster than Netflix did at its infancy. Within the next six years, Roku is expected to reach 80 million active users and there's no indication the company is slowing down.
On average, Roku has tallied an average of 9 percent quarter-over-quarter growths for the last nine quarters in the company's Phase II as analysts at William Blair are calling it. Netflix, on the other hand, managed an 8 percent quarter-over-quarter at a comparable point in time.
“In our view, Roku will experience similar phased stages of international growth as Netflix did during its international expansion,” William Barr analyst Ralph Schackart wrote to clients.
After a Q2 earnings call earlier this month, Roku revealed it currently has 30.5 million active users, a 39 percent growth year-over-year. While Roku is growing, Netflix is losing subscribers, with their Q2 earnings call bringing the grim news they lost subscribers for the first time ever.
“Our missed forecast was across all regions, but slightly more so in regions with price increases,” Netflix said in a statement at the time. “We believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions (while our over-forecast was in every region). Rather, we think Q2’s content slate drove less growth in paid net adds than we anticipated. Additionally, Q1 was so large for us (9.6m net adds), there may have been more pull-forward effect than we realized. In prior quarters with over-forecasts, we’ve found that the underlying long-term growth was not affected and staying focused on the fundamentals of our business served us well.”
Though, admittedly, the whole situation is apples to oranges. While Netflix is king of the streaming world, they're a software-based company while Roku focuses primarily on hardware and software for consumer products. In fact, Roku chief Anthony Wood revealed earlier this year the company has no active plans to introduce original content to The Roku Channel, a company-owned channel available for free on Roku devices.2comments
“We have no plans to license original content. In The Roku Channel (TRC), our focus is deepen content categories and add live content,” said Wood.
What's your go-to binge watch on Netflix? What's your favorite Roku channel? Let us know your thoughts in the comments below!