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In a strategic shift, Roku plans to make its own TV sets

In a strategic shift, Roku plans to make its own TV sets

 February 22, 2022 at 5:33 am   |     Author:   |     Technology  

A Roku streaming box.
Enlarge / A Roku streaming box.

Ars Technica

TV-streaming platform Roku is looking to expand beyond dongles and software deals to make its own TV hardware, according to a report in Insider.

The story appears to be based on two sources with different levels of familiarity with Roku’s plans. The first is someone who participated in a Roku focus group. “They showed different models, feature sets, and names, sizes, price points,” the participant said.

Second, the article cites an executive who says that making TVs has been on Roku’s roadmap for over a year. The executive is quoted briefly and provides a little more detail, saying, “The analysis has been done. They recognized that owning the last bit of branding made a lot of sense, particularly if you are going into content.”

The report claims that Roku has been driven toward this strategy partly due to the supply constraints that have hit consumer electronics. In the company’s last earnings call, its chief financial officer said that supply constraints across the TV market were a factor in the company missing its subscriber growth goals.

Roku used to be best known for its dongles and streaming boxes, but consumers have been moving away from those devices as they’ve purchased more and more smart TVs with streaming apps built in. In recent years, Roku has increasingly made its money by selling its software for smart TVs. In fact, Roku’s operating system is the number-one smart TV OS. Roku also gets a cut when its hardware or software refers subscribers to Netflix and other streaming services, and the company makes money on ads and user data.

A move into TV hardware would allow Roku to take a bigger slice of the pie and build a stronger, more direct connection to its users and customers. However, TV hardware is a challenging and slim-margin business compared to the worlds in which Roku currently operates. This risky new path would not necessarily be a slam dunk.

When reached for comment, a Roku spokesperson told Insider that the company doesn’t comment on rumors or speculation.

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