Latest Sign the Cord-Cutting Revolution Is Over: Roku Users Watch 3 Hours of Content Per Day

Roku revealed two key statistics showing streaming’s increasing ubiquity — and how the device-maker is benefiting from it — when the company reported its fourth quarter earnings on Thursday. First, the company estimated “nearly 1 out of 5 U.S. TV households” now uses one of its devices to stream television. And secondly, Roku said its customers streamed 7.3 billion hours of content during Q4 — an increase of 70 percent year-over-year. To put that into perspective: Across its 27.1 million accounts by the end of 2018, the average Roku viewer was streaming almost 3 hours worth of content each day. It’s a jarring yet fitting number, considering that Roku is continuing to benefit from the growth of major streaming players like Netflix, Hulu and Amazon. Last month, Netflix estimated its 60 million American customers stream 100 minutes of shows each day on average. It goes without saying that many of those customers are streaming Netflix content via Roku devices. At the same time, Roku appears poised to see its billions of streaming hours continue to increase, as more streaming services flood the market. Disney and WarnerMedia are set to launch their own services later this year, as well as Apple. And the sheer volume of content is expanding, with the number of scripted shows on streaming services increasing 37 percent from 2017 to 2018. The Big Three streaming services — Netflix, Amazon and Hulu — took home 12 of 26 Primetime Emmys last September. Quality content, coupled with more providers and more shows, will only drive more time spent using Roku devices. Traditional TV stalwarts, meanwhile, are failing to keep up. DirecTV lost more than 400,000 customers during the fourth quarter, AT&T reported last month. Investors look like they expect this trend — streaming’s rise replacing old school television — to continue. Heading into Thursday afternoon, Roku shares have increased 70 percent to $51.48 per share since the beginning of 2019; after reporting its Q4 financials on Thursday, Roku shares crept up another 4 percent in after-hours trading. Roku has made its name off its array of devices, which range from $30 to $100, as well as a $200 package that includes wireless speakers. But dig a bit deeper into its Q4 results and it becomes evident Roku is focused on moving beyond its dependency on devices sales. Platform revenue, which includes ad sales and licensing, increased nearly 80 percent year-over-year, accounting for $151.4 million in Q4 revenue. Advertisers are progressively turning to Roku as the company looks to not only sell devices but grab eyeballs with its own content. CEO Anthony Wood, in the company’s letter to shareholders, said Roku is focused on adding more “features and content” to The Roku Channel, aiming to drive more ad dollars. That’s well and good, but even without its own compelling content, Roku is set to enjoy a banner year, as streaming’s rising tide is clearly lifting its boat.