ROKU's strong growth in the US hides subdued performances

Roku delivered again strong results for Q2 2020 in the US. Published on Wednesday August 5, the company’s quarterly report highlighted a 41% growth year-on-year, in terms of active accounts, and an even stronger 65% growth of the number of streaming hours – boosted partially those last months by the context of COVID-19, which has become increasingly worrying in the country.

If Roku’s figures are skyrocketing, it is mainly due to its long-time partnership with manufacturer TCL: Roku’s software is directly integrated in every smart TV sold by the Chinese company in the US. Over the last years, TCL has significantly increased its market share in terms of sales in the US, now being the second provider in the country. Hence, Roku's success has been correlated to TCL's success.

Behind the figures, Roku has been facing a growing number of issues recently. On the video market side, the US manufacturer has not set distribution deals yet with the two newest major streaming services: Peacock from Comcast and HBO Max from AT&T/WarnerMedia. The tensions are mainly focused around the issues of data-collection and revenue-sharing between the different actors. On the sales side, Roku lost the tacit exclusive agreement it had with TCL in June when the Chinese manufacturer announced it will also partner with Android TV in the US.

For streaming device providers, partnering with smart TV manufacturers has become a strategic asset: Android TV, which accounts for less than 10% of the market, has been multiplying partnerships both with set-top-box providers and smart TV manufacturers since 2016 -TCL deal being the latest. For both AVOD and SVOD services, dealing directly with smart TV manufacturers is more and more seen as a way to maximise their reach while preserving their data from Amazon's and Roku's domination: Amazon Channels and Prime Video on the SVOD side, Roku Channel on the AVOD side.

Thereby, in a country where streaming is mainly consumed through TV, negotiations between HBO/Peacock and Amazon/Roku are more strategic than ever, as both video, smart TVs and streaming devices markets become overcrowded.

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