Roku Q2: 1.5 Million More Monthly Users, But Streaming Hours Decline 6%
- by Wayne Friedman , August 4, 2021
Roku added 1.5 million monthly active users in the second quarter, but witnessed a 6% slowdown of total streaming hours from the first quarter of this year, according to the company’s earnings release.
This contributed to the company's stock tumbling 8% in after market trading to $387.00.
Total second-quarter streaming hours declined to 17.4 billion hours -- for a 6% drop, a fall of 1 billion hours from the first quarter (18.4 billion). Roku's monthly active users grew to 55.1 million.
Roku points to more out-of-home consumers doing less streaming and TV viewing in the period, as a result of the easing of in-home pandemic restrictions and concerns versus the year-ago quarter.
Still, Roku says overall streaming hours year-over-year were up 19% -- while there was a 19% decline in traditional TV consumption and a 2% drop in TV streaming across all platforms. Data here comes from Nielsen-measured persons two years and older, according to the streaming/digital app distribution company.
advertisement
advertisement
Total company-wide revenues soared 81% over the year-ago second-quarter 2020 period to $645 million.
Revenue from content distribution and advertising -- via Roku’s "platform" -- grew to $532 million, up 117%. Its set-top-box player revenue sales were virtually unchanged, inching 1% higher to $112.8 million.
The company’s average revenue per user (ARPU) climbed sharply -- 46% higher to $36.46.
Second-quarter operating income was $69.1 million. A year ago, the company posted a second-quarter operating loss of $42.2 million.
Wayne, it's simple. As more and more viewing options become available---currently in SVOD or AVOD---almost everybody's share of time spent is likely to decline---just to make room for the newcomers.
This is nothing new. In ancient times when the average TV home had only 6 channels to select from and some dayparts---like the early mornings or very late evenings had little if anything to offer, the average adult spent only 3 hours a day watching TV. Later,when the number of channels available per TV home rose to about 200 and all dayparts had content, the average adult, not surprisingly, spent more time with "the Tube"---but only averaged about 5 hours a day. Result: rating fragmentation. Meaning that there are limits to how much time we can devote to all of the content that is available. Also, meaning that rating fragmentataion---long the province of "pay TV" is now coming to streaming. Not everyone will be affected to the same degree. Some newcomer services will score time spent gains, initially, and there will be a progressive hike in overall time spent with streaming---but only to a point. As that point is reached, the various contenders will have to split the total audience pie into ever finer slices---there's no way to avoid it.