You are the product if you use a Roku streamer, says company CEO

Posted:
in iPod + iTunes + AppleTV
In an interview, the Roku CEO admits that the streaming device firm is in the "ad and content" business, rather than the hardware one.




Roku made $61.5 million from its streaming video devices this past financial quarter -- but then also $75.1 million from advertising and licensing. CEO Anthony Wood now says that the company is not focusing on hardware, it is aiming to monetize its users.

"We don't really make money [from the hardware] we certainly don't make enough money to support our engineering organization and our operations and the cost to run the Roku service," he said. "That's not paid for by the hardware. That's paid for by our ad and content business."

While Amazon does not release sales figures for its Fire TVs, it's believed that Roku hardware is the biggest-selling of all streaming video devices. Last year AppleInsider reported that Roku had 37 percent of the US market compared to Apple TV's 15 percent.




On top of its devices like the $70 Streaming Stick, the company claims that one in four TV sets sold in the US last year come with Roku hardware. The main screen all users see presents Roku's TV offerings but also adverts. "We help content distributors promote their content, and we get paid for that," said Wood.

Roku is just now taking that further, and applying it to you even though you're paying for the devices either directly to the company or via how much your TV set costs. And, this is in addition to advertisements that you may get from Amazon or Netflix.

While it is explicitly now focusing on using audiences to increases advertising revenue, Roku is still developing new hardware. Speaking about the its recently announced speakers, Wood explained why the company is making them. "We're trying to make Roku TV the best TV it can be. And that will will cause us to be able to sell more ads, frankly, in the long run."

The Verge which interviewed CEO Anthony Wood for its podcast, reports that the company is also aiming to ultimately develop its current Roku Channel into the main way people interact with the service.

Apple has tried a similar user management move, if not an extra advertisement maneuver, with its TV app on both Apple TV and iOS. However, as well as the technology to aggregate multiple TV providers into one app there are issues of permissions from content providers. While Netflix is available on Apple TV, that company has not yet agreed to allow its service to be included in the TV app.

Like Apple TV, Roku TV's service includes apps and some of those will also show you adverts. However, it can be Roku's own team that is selling that advertising space. Which means that the company is selling you. Back in 2014 when speaking about free services, Apple's Tim Cook made the observation that "when an online service is free, you're not the customer. You're the product." The concept applies to Roku's model as well.
«134

Comments

  • Reply 1 of 66
    racerhomie3racerhomie3 Posts: 1,169member
     Isn’t this sort of obvious . Nothing is free in this world .
    magman1979Soliwilliamlondonjbdragonwatto_cobra
  • Reply 2 of 66
    DAalsethDAalseth Posts: 765member
    We got a new TV this year and found that it contained a Roku. We didn't notice that when we picked it up in the store. The Roku has been working well for us, but I sure hope they don't get really pushy with the ads.
  • Reply 3 of 66
    seanismorrisseanismorris Posts: 1,110member
    You’d think someone would buy Roku (the company)...

    Roku gets good reviews, and I’ve heard it’s a superior device.

    I wonder what Disney + Roku would look like...  Disney has tons of content, and old content that they could throw in for free; while monetizing new movies and shows.  They also has ESPN, which they have not transitioned very well to the digital age.
  • Reply 4 of 66
    Jessee MichaelJessee Michael Posts: 7unconfirmed, member
    I'll admit, even with Fire Sticks and an Apple TV, our 4 y/o Roku is still our go-to device. Simple to navigate, easy to search, great little remote (even though I use a Harmony more often), and the ability to connect headphones to the remote is pure genius. I am more than happy to be a product so they can be profitable. Any advertising they do on the system isn't intrusive at all.
    kirkgraytycho_macuser
  • Reply 5 of 66
    DAalseth said: "I sure hope they don't get really pushy with the ads." Don't you understand? YOU are the ad. Roku makes money off of you. What if someone wanted to punish you for viewing a lot of content on CNN? The government can now identify you and come after you. It's what gun-rights advocates feared so much about gun registration. With Roku, you're now registered as a certain type of person, based on your viewing habits.
    claire1racerhomie3chasmentropyslostkiwikirkgrayjbdragonwatto_cobrabaconstangNotsofast
  • Reply 6 of 66
    CobraGuyCobraGuy Posts: 76member
    Never been excited about Roku product.

    I have owned an Apple TV of some sort since day one.

    I currently have a Apple TV 4k but also have an nVidia Shield which I like quite a bit too.
    igorskymagman1979watto_cobra
  • Reply 7 of 66
    nhtnht Posts: 4,496member
    DAalseth said: "I sure hope they don't get really pushy with the ads." Don't you understand? YOU are the ad. Roku makes money off of you. What if someone wanted to punish you for viewing a lot of content on CNN? The government can now identify you and come after you. It's what gun-rights advocates feared so much about gun registration. With Roku, you're now registered as a certain type of person, based on your viewing habits.
    There is a bit of paranoia in this comment and a bit of truth.

    Anyone doing careful analysis of my viewing habits would put me in the "Everything is Awesome" (Lego Movie reference) category since my kids steal my phone all the time to watch stuff.
    watto_cobra[Deleted User]
  • Reply 8 of 66
    gatorguygatorguy Posts: 21,302member
    DAalseth said: "I sure hope they don't get really pushy with the ads." Don't you understand? YOU are the ad. Roku makes money off of you. What if someone wanted to punish you for viewing a lot of content on CNN? The government can now identify you and come after you. It's what gun-rights advocates feared so much about gun registration. With Roku, you're now registered as a certain type of person, based on your viewing habits.
    There is not enough tinfoil in Publix to cover your worries. 
    igorskySolidysamoriatycho_macuser[Deleted User]
  • Reply 9 of 66
    nunzynunzy Posts: 662member
    Apple doesn't sell it's customers.
    chasmjbdragonbaconstang
  • Reply 10 of 66
    gatorguygatorguy Posts: 21,302member
    nht said:
    DAalseth said: "I sure hope they don't get really pushy with the ads." Don't you understand? YOU are the ad. Roku makes money off of you. What if someone wanted to punish you for viewing a lot of content on CNN? The government can now identify you and come after you. It's what gun-rights advocates feared so much about gun registration. With Roku, you're now registered as a certain type of person, based on your viewing habits.
    There is a bit of paranoia in this comment and a bit of truth.

    Anyone doing careful analysis of my viewing habits would put me in the "Everything is Awesome" (Lego Movie reference) category since my kids steal my phone all the time to watch stuff.
    LOL...Same here. 

    I spent 30 minutes this morning clearing out "liked" content on YouTube that wasn't MY likes but affecting what YouTube Music put together for MY suggested playlist, and popping up notices about videos and music I have zero interest in. Less than zero if it were possible. My son, his best friend, and occasionally my wife all "liked" various content but all connected to my account. 

    If Roku is doing targeted ads, and I'm not aware they are, they're targeting one other adult (who praise be is moving into his own place soon), a couple of old people, daughter and son-in-law, and a few assorted friends of the family ages 20-94.  So selling me? Ummm, no.  

    Roku may be doing some ad placement but I'd guess that most of their income outside of hardware comes from licensing the Roku interface. It's become an attractive selling point for a couple of the TV manufacturers. 
    edited July 2018
  • Reply 11 of 66
    claire1claire1 Posts: 510unconfirmed, member
    Bravo for admitting it! Now to get Google to admit this along with how much they don't care about their customers.

    You’d think someone would buy Roku (the company)...

    Roku gets good reviews, and I’ve heard it’s a superior device.

    I wonder what Disney + Roku would look like...  Disney has tons of content, and old content that they could throw in for free; while monetizing new movies and shows.  They also has ESPN, which they have not transitioned very well to the digital age.

    Superior to what? The crappy android tv streamers? It's not a great device and is just another "me too" device following Apple's lead.

    I'll admit, even with Fire Sticks and an Apple TV, our 4 y/o Roku is still our go-to device. Simple to navigate, easy to search, great little remote (even though I use a Harmony more often), and the ability to connect headphones to the remote is pure genius. I am more than happy to be a product so they can be profitable. Any advertising they do on the system isn't intrusive at all.

    Not even close. I had to deal with a Roku while house sitting and you'd have to pay ME to use it. I'm used to the futuristic Apple TV Siri Remote and its simplicity so searching on Roku was a PAIN. It would take me about 45 seconds with latency and clicking buttons just to move over a letter where it would take me maybe 5 seconds using voice on Siri or 15 seconds swiping. Roku was such a pain I stopped using search.

    Also so many ADS.
    magman1979lostkiwiStrangeDayswatto_cobra
  • Reply 12 of 66
    claire1claire1 Posts: 510unconfirmed, member

    gatorguy said:
    DAalseth said: "I sure hope they don't get really pushy with the ads." Don't you understand? YOU are the ad. Roku makes money off of you. What if someone wanted to punish you for viewing a lot of content on CNN? The government can now identify you and come after you. It's what gun-rights advocates feared so much about gun registration. With Roku, you're now registered as a certain type of person, based on your viewing habits.
    There is not enough tinfoil in Publix to cover your worries. 
    To be fair just 20 years ago if any said what Google and Amazon would do in the future people would have laughed at them. In 20 years people could be comfortable with being punished for the content they consume.

    "Cooking the frog slowly."
    Baby steps....
    racerhomie3larryjwentropysbaconstangwatto_cobra
  • Reply 13 of 66
    gatorguygatorguy Posts: 21,302member
    claire1 said:
    Bravo for admitting it! Now to get Google to admit this along with how much they don't care about their customers.

    You’d think someone would buy Roku (the company)...

    Roku gets good reviews, and I’ve heard it’s a superior device.

    I wonder what Disney + Roku would look like...  Disney has tons of content, and old content that they could throw in for free; while monetizing new movies and shows.  They also has ESPN, which they have not transitioned very well to the digital age.

    Superior to what? The crappy android tv streamers? It's not a great device and is just another "me too" device following Apple's lead.

    I'll admit, even with Fire Sticks and an Apple TV, our 4 y/o Roku is still our go-to device. Simple to navigate, easy to search, great little remote (even though I use a Harmony more often), and the ability to connect headphones to the remote is pure genius. I am more than happy to be a product so they can be profitable. Any advertising they do on the system isn't intrusive at all.

    Not even close. I had to deal with a Roku while house sitting and you'd have to pay ME to use it. I'm used to the futuristic Apple TV Siri Remote and its simplicity so searching on Roku was a PAIN. It would take me about 45 seconds with latency and clicking buttons just to move over a letter where it would take me maybe 5 seconds using voice on Siri or 15 seconds swiping. Roku was such a pain I stopped using search.


    Roku TV's offer voice search.  I use it frequently on a TCL for searching content. As for ads from what I'm reading they are not targeting specific people anyway, more so pre-roll and screen-saver screen stuff. 
    http://www.businessinsider.com/heres-how-roku-makes-its-money-2017-9
    https://variety.com/2018/digital/news/roku-q1-2018-earnings-1202804874/
    edited July 2018 tycho_macuserbigpics
  • Reply 14 of 66
    igorskyigorsky Posts: 425member
     Isn’t this sort of obvious . Nothing is free in this world .
    But...Roku isn't free.
    retrogustoCesar Battistini MazierodysamoriarotateleftbyteStrangeDaysbaconstangdrow
  • Reply 15 of 66
    tallest skiltallest skil Posts: 43,399member
    claire1 said:
    "Cooking the frog slowly."
    Baby steps....
    But but but but but but but the slippery slope is a fallacyyyyyy!
  • Reply 16 of 66
    mike1mike1 Posts: 1,947member
    I'm an ATV user, but from talking to friends, coworkers and relatives, I'd bet that Amazon FireSticks own the biz these days.
  • Reply 17 of 66
    larryalarrya Posts: 552member
    claire1 said:
    Bravo for admitting it! Now to get Google to admit this along with how much they don't care about their customers.

    You’d think someone would buy Roku (the company)...

    Roku gets good reviews, and I’ve heard it’s a superior device.

    I wonder what Disney + Roku would look like...  Disney has tons of content, and old content that they could throw in for free; while monetizing new movies and shows.  They also has ESPN, which they have not transitioned very well to the digital age.

    Superior to what? The crappy android tv streamers? It's not a great device and is just another "me too" device following Apple's lead.

    I'll admit, even with Fire Sticks and an Apple TV, our 4 y/o Roku is still our go-to device. Simple to navigate, easy to search, great little remote (even though I use a Harmony more often), and the ability to connect headphones to the remote is pure genius. I am more than happy to be a product so they can be profitable. Any advertising they do on the system isn't intrusive at all.

    Not even close. I had to deal with a Roku while house sitting and you'd have to pay ME to use it. I'm used to the futuristic Apple TV Siri Remote and its simplicity so searching on Roku was a PAIN. It would take me about 45 seconds with latency and clicking buttons just to move over a letter where it would take me maybe 5 seconds using voice on Siri or 15 seconds swiping. Roku was such a pain I stopped using search.

    Also so many ADS.
    This is really interesting, because I've never seen a single ad on my Roku TV.  I use it mainly to see my DirecTV STB, YouTube, and Plex.  I don't have a recent Apple TV, but it certainly is head and shoulders above my 2nd Gen ATV.  My ATV was my first Apple product, and while I continue to use iPhones, iPads, Apple Watch, and Macs, I don't feel the slightest urge to ever buy another one while this option is still available.
    edited July 2018
  • Reply 18 of 66
    SoliSoli Posts: 9,382member
    igorsky said:
     Isn’t this sort of obvious . Nothing is free in this world .
    But...Roku isn't free.
    OK, then “too good to be true” in regards to the purchase price of the HW.
  • Reply 19 of 66
    chasmchasm Posts: 1,704member
    And this comment thread illustrates the problem with understanding privacy: people are incredibly dense when it comes to appreciating the value and importance of their privacy and power ina relationship.

    Roku may or may not be inserting ads in your stream, but that’s not what the CEO said. What he said was that they are harvesting data about you without your permission or knowledge, and in the case of Smart TVs that they are likely using the built-in AV tech to find out even more about you than just “what you watch” because their former business model (selling you hardware and support) was a failure.

    Regardless of to what degree you think Roku is spying on you and selling that data to anyone and everyone with cash, they didn’t ask you for permission to do that. That’s the point. It tells you a lot about what they think of their customers, oops sorry, their product.

    I’m much relieved I never bought a Roku, or a spy ... oops, “smart” ... TV. It used to be that Apple’s superior operating system and engineering kept me loyal to the company, but now it’s their stance on privacy and security. And if you’re smart, you will make this more of a priority too.
    edited July 2018 entropyslostkiwipscooter63liketheskyRayz2016macplusplusStrangeDaysbaconstangracerhomie3watto_cobra
  • Reply 20 of 66
    gatorguygatorguy Posts: 21,302member
    chasm said:

    Roku may or may not be inserting ads in your stream, but that’s not what the CEO said. What he said was that they are harvesting data about you without your permission or knowledge
    Where and when did he say that?

    For those using Roku but not wanting any Roku-delivered ads based on your viewing simply checkbox "Limit Ad Tracking" in privacy settings (your iPhone has a similar setting). At the same time, or instead if you wish, reset your Advertising Identifier. 
    If you have a SmartTV with Roku built-in then under those same privacy settings also turn off the Smart TV Experience (if you enabled it during setup).
    edited July 2018 liketheskymuthuk_vanalingamwaverboy
Sign In or Register to comment.