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Investors are missing the point on Roku

[2019.11.07, Thu 18:05] More than 60% of US households today own a smart television, and Roku is dominating that market - one out of every three smart televisions uses the Roku operating system. Roku has the unique position in the market as the platform on which all of connected television streaming content is available for advertising. Roku's model enables the company to sell advertising for its own Roku channel as well as for the more than 1,000 apps available within the Roku ecosystem. With the click of a button, Roku users can seamlessly and quickly add a subscription to their televisions, and in the process Roku is served up a share of the subscription revenue. The Roku model is a rare one where everyone wins: Consumers get access to content on the streaming platform of their choice, and they see significantly less advertising than on traditional TV; marketers can tap into streaming video and reach the cord cutters who have abandoned live TV; and content creators are making real money through the Roku ecosystem. It seems many analysts and investors are too blinded by the harsh struggle among the various participants in the streaming wars to see that Roku is flourishing in a relative position of calm. Although Roku made it clear this decision was about reinvesting to sustain growth, investors did not seem to care much, taking a billion dollar haircut to the company in the first hours of trading.
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