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Earnings

Roku earnings: COVID-19 accelerates cord-cutting

Roku earnings: COVID-19 accelerates cord-cutting
  • Q1 revenue: $321 million (+55% YoY, -22% QoQ, vs. $306.7M expected)
  • Q1 loss: $55.2M (up 515% YoY from $10.7M in Q1 2019)
  • Q2 guidance: Roku has withdrawn its guidance for the rest of the year.

The big number: Roku closed in on 40 million active accounts in Q1, ending March with 39.8 million accounts, and growing its user base 37% year-over-year. Account growth has been accelerating under shutdown orders, with Roku disclosing that new account creation increased by more than 70% in April alone. Company stock surged 8% Thursday before the afternoon earnings call, but those gains were being erased in after-hours trading.

People are talking: "The pandemic is accelerating the shift to streaming by both viewers and the industry," said Roku CEO Anthony Wood during the earnings call. Consumers streamed 13.2 billion hours in Q1 of 2020, up 49% year-over-year, as streaming became everyone's favorite pastime during quarantine.

Opportunities: Roku executives argued Thursday that consumers continued to move away from traditional TV over the past couple of weeks despite being homebound, highlighting that prime-time TV viewing was down 18% year-over-year among 18- to 34-year-olds from mid-March to mid-April. Many of these viewers are opting for streaming instead, a trend that could accelerate during a prolonged economic downturn. "We believe that the pandemic is accelerating secular trends towards streaming, and that these trends are permanent," Wood said. "All those cord-cutters are not gonna re-sign up for cable."

Threats: Roku makes most of its money with advertising, and the company warned investors that it had seen "higher than normal cancellations" amid a general ad market decline. However, the company said it still expected to grow its ad business in 2020, as advertisers shift dollars to digital, and, among other things, look for ways to place advertising that would otherwise have run against live sports.

The power struggle: Roku has made some baby steps over the past two years to compete more holistically against Amazon and Google, which included the launch of its own line of smart speakers. The company also reportedly developed its own router, but has yet to officially announce that device. Engagement in these non-core business areas could slow over the coming months, as Roku told investors Thursday that it took steps to reduce the growth of its expenses at the end of the past quarter, cautioning that could slow progress in "strategic investment areas."

People

Beeper built the universal messaging app the world needed

It's an app for all your social apps. And part of an entirely new way to think about chat.

Beeper is an app for all your messaging apps, including the hard-to-access ones.

Image: Beeper

Eric Migicovsky likes to tinker. And the former CEO of Pebble — he's now a partner at Y Combinator — knows a thing or two about messaging. "You remember on the Pebble," he asked me, "how we had this microphone, and on Android you could reply to all kinds of messages?" Migicovsky liked that feature, and he especially liked that it didn't care which app you used. Android-using Pebble wearers could speak their replies to texts, Messenger chats, almost any notification that popped up.

That kind of universal, non-siloed approach to messaging appealed to Migicovsky, and it didn't really exist anywhere else. "Remember Trillian from back in the day?" he asked, somewhat wistfully. "Or Adium?" They were the gold-standard of universal messaging apps; users could log in to their AIM, MSN, GChat and Yahoo accounts, and chat with everyone in one place.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Power

What TV remotes tell us about power struggles in streaming

TV remote controls are a major battlefield in the TV wars, which are fought one branded button at a time.

LG's 2021 smart TV remote control features a total of three buttons for voice control.

Image: LG

Don't touch that dial: As TV manufacturers are unveiling their 2021 models at this year's virtual CES, they're also giving us a first look at the remote controls that will be shipping with those big, shiny and smart TV sets.

There were a few surprises. LG's remotes come with built-in NFC to transfer videos from mobile devices to the TV, and Samsung's remotes incorporate solar cells that are meant to reduce battery waste. The new crop of 2021 TV remotes also perfectly encapsulates the conflicts and power struggles in the TV industry, from streaming services vying for attention to voice assistant platforms' fierce competition.

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Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Power

Roku is becoming the most powerful company in streaming

A growing user base will give it even more power in content negotiations.

Roku's emerging as one of the streaming war's biggest winners.

Photo: Luke Sharrett/Getty Images

Roku's bet on smart TVs is paying off: Seven years after the company first began licensing its operating system to TV manufacturers, it has become a market leader in North America. Roku and its hardware partners sold more smart TVs in the U.S. in 2020 than competitors like Samsung, LG and Vizio, according to data from the NPD Group released by Roku on Friday.

Roku TVs had a 38% market share in the U.S. and a 31% market share in Canada, according to NPD's data. Roku also announced earlier this week that it had ended 2020 with 51.2 million active accounts, adding around 14 million accounts over the past 12 months. Altogether, consumers streamed 58.7 billion hours of entertainment through their Roku devices in 2020, according to a news release.

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Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Politics

In 2020, COVID-19 derailed the privacy debate

From biometric monitoring to unregulated contact tracing, the crisis opened up new privacy vulnerabilities that regulators did little to address.

Albert Fox Cahn, executive director of the Surveillance Technology Oversight Project, says the COVID-19 pandemic has become a "cash grab" for surveillance tech companies.

Photo: Lianhao Qu/Unsplash

As the coronavirus began its inexorable spread across the United States last spring, Adam Schwartz, senior staff attorney at the Electronic Frontier Foundation, worried the virus would bring with it another scourge: mass surveillance.

"A lot of really bad ideas were being advanced here in the U.S. and a lot of really bad ideas were being actually implemented in foreign countries," Schwartz said.

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Issie Lapowsky
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
People

The year our personal lives took center stage at work

2020's blurring of professional and personal boundaries exacerbated disparities, humanized leaders and put personal values front and center.

In 2020, the personal and the professional became inextricable at work.

Photo: Tom Werner/Getty Images

For those of us lucky enough to keep our jobs and privileged enough to be able to work from home, our whole selves were bared at work this year. Our homes and faces were blown up for virtual inspection. Our children's demands and crises filled our working hours, and our working mothers became schoolteachers and housewives, whether they wanted to or not. Our illnesses became vital public information, and our tragedies shared. Our work lives ate into our social lives until there was no boundary between them.

In 2020, the personal and the professional became inextricable at work. Remote work might be the most sexy 2020 trend, but for the CEOs and leaders I spoke with, the de-professionalization of work could be the most important effect on a personal level. It's the one that has caused the most harm to women in the workplace and destroyed work-life balance for basically everyone. It's also what has contributed to the majority of work-from-home Americans being more satisfied with their work lives than they were before, mostly because they feel more connected to their families, they're able to set their own schedules and they're more comfortable at home, according to a Morning Consult poll. While we can't know exactly how many and who will be going back to the office just yet, as long as there is some kind of flexible work schedule, people's personal lives will be part of their work lives and vice versa.

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Anna Kramer

Anna Kramer is a reporter at Protocol (@ anna_c_kramer), where she helps write and produce Source Code, Protocol's daily newsletter. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

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