• by Wayne Friedman , Staff Writer, February 20, 2024

Major brand ownership of first-party data could make things much harder for Roku in a tougher and more mature streaming marketplace.

According to Moffett Nathanson Research analysis, big digital media companies working with major brands -- Amazon, Walmart, and Google -- are now positioning themselves to move in major ways.

Roku says it has its own first-party advantage: “With our platform advantages, first-party relationship with 80 million active accounts, and deep user engagement, we are well-positioned to accelerate revenue growth in future years,” its recent shareholder letter reads.

The pressure is on Roku even as its most recent quarterly data reporting period overachieved -- up 14% to 80 million active accounts, adding 4.2 million accounts from the previous third-quarter period.

But investors must now finally think about a number of maturing streaming trends as big media and marketing deals and sinking ad pricing will make it more difficult for the streaming video distributor to show continued strength.

For instance, there is Amazon Prime Video, which started up an ad-supported option earlier this year.

Then there is Walmart, which has finalized a deal to purchase Vizio, paving the way for it to become a major potential rival to Roku.

There are Netflix and Disney+, continuing to push and expand their ad-supported streamers' efforts.  And there are still rising FAST channels Tubi and Pluto TV, blanketing the market with tons of ad inventory.

All this is pushing down cost-per-thousand viewer pricing (CPMs). That is not good news. 

And Michael Nathanson says there is more: “We find it odd that, in light of the collapse of linear ratings, two Hollywood strikes that crippled scripted content and the nascent state of ad competitors, Roku’s advertising revenues are not showing faster signs of growth.”

And those investors apparently think that now in light of all this -- especially today's news of Walmart and Vizio striking a deal -- that the writing that was long assumed to be far off in the future wall is actually getting much closer.

Roku's stock dropped an eye-opening 24% on Friday, landing at $72.00.