What Roku's Management Calls Its Biggest Challenge
Roku is best known for the small set-top boxes and streaming sticks it produces, but the company has its eyes set on a much bigger prize than being another box that sits on a shelf. In fact, Roku's ultimate goal is to become an embedded part of most TVs by licensing its TV operating system to manufacturers.
"Our fundamental thesis that all TV manufacturers will license an OS has not changed," CEO Anthony Wood said on the company's second-quarter earnings call.
Half of new Roku accounts came from licensed sources in the first quarter. That number fell below 50% as player sales outperformed in the second quarter, but management reiterated long-term expectations that the majority of new users will come from sources like Roku TVs. If Roku's thesis is correct, the company's player business may eventually disappear entirely.
So, what's stopping Roku from getting its software on TVs? Manufacturers are still working on their own homegrown operating systems, and they're very slow to change.
"Our fundamental thesis that all TV manufacturers will license an OS has not changed," CEO Anthony Wood said on the company's second-quarter earnings call.
Half of new Roku accounts came from licensed sources in the first quarter. That number fell below 50% as player sales outperformed in the second quarter, but management reiterated long-term expectations that the majority of new users will come from sources like Roku TVs. If Roku's thesis is correct, the company's player business may eventually disappear entirely.
So, what's stopping Roku from getting its software on TVs? Manufacturers are still working on their own homegrown operating systems, and they're very slow to change.

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