What occurred
Shares of Roku (ROKU -8.32%) had been buying and selling down 8.2% as of 12:27 p.m. ET on Tuesday.
Whereas the inventory was falling on a down day for the markets, there was constructive information for Roku on the content-acquisition entrance. Lions Gate Leisure introduced a partnership with The Roku Channel to present customers unique, free entry to Lionsgate’s theatrical releases.
So what
This settlement is the newest transfer to carry extra unique content material to Roku’s free ad-supported channel to draw extra customers. Roku initially launched The Roku Channel in 2017, and it has been rising a lot quicker than the remainder of the platform. It is now among the many prime 5 channels on the platform, with streaming hours on The Roku Channel greater than doubling yr over yr in 2021.
Simply final week, Roku introduced a inexperienced gentle for the brand new Roku Authentic collection Sincere Renovations, hosted by Jessica Alba. This follows a critical push the corporate made final yr when it launched 30 Roku Originals in Might.
Nevertheless, the corporate skilled decelerating account progress all year long. The corporate reported lively account progress of 17% within the fourth quarter of 2021, a far cry from the 39% reported in the identical quarter of 2020. That explains why the inventory is down 80% from its all-time excessive, and why buyers proceed to punish the streaming platform.
Picture supply: Getty Photographs.
Now what
It would take some time for the unique content material investments to repay. Roku is coping with main financial headwinds within the close to time period, with inflation, tight provide chains, and decrease shopper demand pressuring progress. Traders should not count on thrilling numbers when Roku studies first-quarter earnings outcomes on Thursday, April 28.
