Roku: Gamble On Eventual Original Content
Roku recently entered the world of Wall Street.
After an exciting IPO debut, the shares have sold off.
The company's stock, being so young, cannot tell us a lot of information yet; traders are still figuring out this new story.
Buying Roku is a bet that it will eventually compete with Netflix and Disney by producing original content.
Roku (NASDAQ:ROKU) recently became a publicly traded stock. It is a streaming concern that produces devices powered by a proprietary operating system for purposes of allowing companies that aggregate and produce content, such as Netflix (NASDAQ:NFLX), to place their content on television sets. Consumers buy Roku products so they can watch stuff from Netflix, etc.
As such, to me that's a rather boring line of business into which to buy. Not necessarily a huge moat against competition. Plus, the company is challenged from a profitability standpoint. (That may be an understatement; according to this piece, Roku hasn't seen positive earnings for well over a decade.)
I am nevertheless interested in the stock. The reasons for my interest are very speculative, and that should be noted. But even with the speculative angle, I can't help but want to do more research on the company.
Anyone who has read my articles knows what I'm going to say next: it is the original content angle that has me excited about Roku.
At this time, the company isn't talking about that. In fact, this article over at MarketWatch clearly states the thinking on the part of management about how it intends to grow. Licensing of the software, advertising, and revenue-split for products sold to consumers on its platform are, for now, its business model. (This Seeking Alpha piece poses a good question about the eventual saturation Roku may face.)
I doubt that's a forever plan. It can't be.
Roku has built out a solid technological platform that can aggregate the products of different content producers and provides an alternative to multi-channel video programming distributors. Consumers have choice at this point, and they can do something about the fabled cord - cut it out entirely, reduce it, subscribe to a service here and a service there for a few months and then go on to other ones, etc.
sources:https://seekingalpha.com/article/4112055-roku-gamble-eventual-original-content
After an exciting IPO debut, the shares have sold off.
The company's stock, being so young, cannot tell us a lot of information yet; traders are still figuring out this new story.
Buying Roku is a bet that it will eventually compete with Netflix and Disney by producing original content.
Roku (NASDAQ:ROKU) recently became a publicly traded stock. It is a streaming concern that produces devices powered by a proprietary operating system for purposes of allowing companies that aggregate and produce content, such as Netflix (NASDAQ:NFLX), to place their content on television sets. Consumers buy Roku products so they can watch stuff from Netflix, etc.
As such, to me that's a rather boring line of business into which to buy. Not necessarily a huge moat against competition. Plus, the company is challenged from a profitability standpoint. (That may be an understatement; according to this piece, Roku hasn't seen positive earnings for well over a decade.)
I am nevertheless interested in the stock. The reasons for my interest are very speculative, and that should be noted. But even with the speculative angle, I can't help but want to do more research on the company.
Anyone who has read my articles knows what I'm going to say next: it is the original content angle that has me excited about Roku.
At this time, the company isn't talking about that. In fact, this article over at MarketWatch clearly states the thinking on the part of management about how it intends to grow. Licensing of the software, advertising, and revenue-split for products sold to consumers on its platform are, for now, its business model. (This Seeking Alpha piece poses a good question about the eventual saturation Roku may face.)
I doubt that's a forever plan. It can't be.
Roku has built out a solid technological platform that can aggregate the products of different content producers and provides an alternative to multi-channel video programming distributors. Consumers have choice at this point, and they can do something about the fabled cord - cut it out entirely, reduce it, subscribe to a service here and a service there for a few months and then go on to other ones, etc.
sources:https://seekingalpha.com/article/4112055-roku-gamble-eventual-original-content
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