Roku isn’t ready to give up on dongles: Company executives told reporters and analysts this week that streaming adapters remain a key part of the company’s business, despite reports of consumers increasingly migrating to smart TVs for their binge-watching needs.
“Every year I've been here, someone has called the demise of the streaming player,” Roku CFO Steve Louden told Protocol following the company’s earnings release Thursday afternoon. “It continues to be a good source of accounts for us.”
Roku CEO Anthony Wood echoed those remarks during the company’s earnings call. “We sell a lot of streaming players to people that have an older TV or a competitor's smart TV,” he said. Both smart TVs and streaming adapters help the company grow its user base, which it then monetizes with ads and services. “They're both important,” Wood said. “They're both not going away anytime soon.”
Louden and Wood were responding to a recent report from streaming analytics company Conviva, which detailed that the global usage of streaming adapters had fallen for the first time in Q4 of 2021, while smart TVs continue to see double-digit usage growth.
The two executives acknowledged the growing importance of smart TVs. “Over time, there will be less need for players,” Louden said. Wood called smart TVs strategically more important due to longer device life cycles. “People keep them for about seven years, roughly,” he said.
The flip side of those long life cycles is that TVs made four or five years ago often don’t feature the latest streaming apps, with Wood pointing out that some competitors only update their TVs for two years. “That becomes a great place for us to sell a streaming player to,” he said.
Another reason streaming players remain strategically important to Roku: Having multiple device types has helped the company navigate supply chain issues that have been affecting the industry. Roku’s China-based TV partners in particular had trouble keeping devices in stock last year.
Roku’s business felt this, too, to the point where the company only had 3.7 million new accounts in Q4, as opposed to 5.2 million during the same quarter the year before. Executives told investors Thursday that the company’s player business helped to mitigate some of the supply chain constraints on the TV side, but that did little to quell investor concerns. The company’s share price was down 25% Friday.
