New Channels, NewFronts Focus Roku Stock on Advertising

When the Interactive Advertising Bureau holds its postponed NewFronts next week, Roku Inc. (NASDAQ: ROKU) will be the first presenter out of the gate.

The presentations, which were originally scheduled for April, were changed to a streaming presentation because of the COVID-19 pandemic.

This is Roku’s first time participating in the NewFronts, which are often compared with the Upfronts for network television. At the Upfronts, media agencies preview television programming for the coming network seasons and have the opportunity to secure TV advertising slots at favorable rates.

The NewFronts focus on new media, like OTT (over the top) television, gaming and e-sports. With the growth in advertising among these media, the NewFronts have gained prominence.

It makes sense for Roku, the leading streaming platform in the United States, to be participating because it has made advertising an important part of its business model. The company offers a streaming device, a platform for various streaming services and a free Roku channel supported by advertising.

“Streaming is accelerating more than ever before, and linear TV’s future is pretty unknown,” Allison Levin, Roku’s vice president of ad sales and strategy, told Variety in an interview. “We believe that this really is the moment, and this is the streaming decade.”

A More Targeted Approach to Advertising

Roku just announced that it is partnering with Kroger Precision Marketing on a new shopper data program to make TV advertising more precise and measurable for consumer packaged goods marketers.

The intent of the partnership is to build a first-to-market targeting and attribution tool for streaming TV. This could eventually be a powerful tool for creating advertising revenue, by offering advertisers a more targeted approach.

Once integration is complete, marketers will have access to Kroger data science for targeting and closed-loop attribution to measure campaign performance across the Roku platform. At the same time, the marketers will have tools available from Roku to measure the effectiveness of linear TV built on the largest licensed TV operating system in North America.

Adding 100 Channels to Its Lineup

Roku is also adding 100 channels to its ad-supported Roku Channel. The free lineup will include news, entertainment and lifestyle channels, like ABC News, Kidz Bop, Outside TV and Reuters.

The expanded Roku Channel may appeal to cable cutters. But the offering does not exactly match a typical cable television package. It is similar to ad-supported services, like Pluto TV.

Roku is aggressively courting advertisers. The Roku Channel is the fastest-growing ad-supported channel on its platform. “Usage is spiking, and that is exclusively sold by us,” Levin said in an interview with AdExchanger.

Levin said Roku has responded to the pandemic by offering new options to advertisers. The company has also decreased the cost of 15-second ads, to entice advertisers who are being very careful with their budgets.

In the free TV space, Roku is competing with Pluto TV and NBCUniversal’s new streaming service, Peacock. It will offer popular NBC shows and a library of free movies.

Another competitor is Tubi, which Fox purchased earlier this year. It offers thousands of free TV shows and movies, all ad supported. Fox previously owned a stake in Roku.

Upping the Ante?

Google’s (NASDAQ: GOOG) Android TV may soon have a feature that could rival Roku’s streaming device. According to 9to5Google, it is developing voice recognition that will be able to identify different voices.

That means the TV will be able to show your list of favorites, instead of the list for someone else.

Roku and Amazon’s (NASDAQ: AMZN) Fire TV streaming platforms have voice recognition features, but they do not distinguish between individual voices.

Patent Trial Postponed

A $200 million patent trial involving Roku has been postponed from this month until August because of the COVID-19 pandemic, Law360 reports.

U.S. District Judge Alan D. Albright ordered the change in schedule on Monday but noted that because of the changing situation regarding the pandemic, he could not guarantee the trial would take place in August.

The new date is likely to be August 3 or 10.

The jury trial, delayed from June 1, had been rescheduled to begin June 29 in the Western District of Texas.

In April, Roku petitioned the court to delay the trial because its lawyers were under stay-at-home orders because of COVID-19. Judge Albright, who is known for bringing patent lawsuits to trial quickly, denied the request.

On May 8, Chief Judge Orlando Garcia ordered that all trials in the district scheduled through June 30 would have to be continued due to the pandemic, with new dates set by each presiding judge.

Judge Albright then rescheduled the trial for June 29.

MV3 Partners LLC filed suit in October 2018, accusing Roku of infringing on its streaming media patent. MV3 alleges that the Roku Streaming Stick, Roku Ultra and Roku Express infringe on its patent for a system that streams media content from a mobile phone to larger displays, like televisions.