The adaptation of video streaming business model by traditional media companies could be the biggest threat to video streaming services, but the CEO of Roku disagrees. Instead, he said that the coexistence of the two forms of media distributions are partners rather than enemies.
Video streaming services are becoming so popular that users are starting to disconnect from their traditional cable subscriptions in favor of online streaming. According to Roku’s CEO Anthony Wood, there are already more than one million people who made the transfer from traditional media subscriptions to streaming services in the last quarter alone. He noted that subscribers are migrating because of the high cost of traditional cable subscription while streaming options offer more choices at a lower price.
The rising popularity of online video streaming platforms has redefined the media distribution industry and forced media moguls to adapt their business models to the threat that is direct-to-consumer video streaming. It is the reason why Comcast competed with Disney to partner with Century Fox. Similarly, it also motivated AT&T to go after Time Warner.
Above all else, Wood said that symbiotic relationships with traditional media company are what’s vital in surviving the media and video streaming battleground and the entrance of media giants in the video wars isn’t something Roku or other platforms should be worried about.
“One of the things about Roku, we have succeeded by building a great user interface, making it super easy to use,” he said. “And for regular Americans, it’s an easy way to watch TV.”
Instead, Wood explained, they should be treated as a partner rather than a “frenemy.” Comcast’s Xfinity Flex streaming service, for example, is an “important partner” as it advertises on the Roku Platform and the Xfinity app is also available on Roku; in the same manner, Apple and Walt Disney have already expressed their interest to make their streaming platforms available on Roku soon.
“We’re a great partner,” Wood said. “We can really help those companies build scale if they want to use some of the marketing techniques we have on our platform.”
As evidence to Wood’s claims, Roku’s stocks is up 170 percent up year up to date and is currently traded around $83.89 per share despite traditional media companies’ entry to the realm of video streaming.
