Roku spends $ 185 million to enter a business that most other streaming platforms have avoided.
At the beginning of May, the company announced that it would acquire television, the cheapest of all live television streaming services. For $ 9 per month, FNNDLY TV offers a pack of channels that you will generally find in a cable television package, including Hallmark, A&E and the weather channel.
Although it is normal for streaming platforms to offer their own free or premium streaming services, most do not sell their own packets of cable channels with an optional DVR service. Roku does something quite unusual here, and even if he says he is just trying to increase subscription income on his platform, that doesn’t look like the whole story for me.
How is integrated
FNNDLY TV is what is known in industry jargon as “Virtual multi -channel video programming distributor” or VMVPD. You can also use the terms of live TV streaming services, streaming channel bundles or cable replacements.
Whatever the nomenclature, the fact is that they are essentially cable television packages delivered on the internet. You get a large bucket of wired channels, a channel -based channel guide to cover and DVR features to record live broadcasts and look at them as you wish.
Most of the main streaming platforms have remained outside this company, which involves cutting transport agreements with many television programmers (and facing the risk of power outages when renewal negotiations fail). It is a disorderly company which is barely profitable, if not at all.
Thus, although you can access services like Hulu + Live TV and Fubo on a Fire TV or Apple TV 4K, Amazon and Apple stick have not taken the trouble to set up their own chain groups. (The only exception is Google, which operates YouTube TV and has its own Google TV / Android TV streaming platform.)
Nevertheless, Roku sees an opportunity on television, which claimed to be profitable in 2022. Although Roku was described once as an advertising company, he recently talked about his plans to increase subscription income. The company already gets a reduction when users subscribe to services on its platform, but with Frndly TV, it can claim 100% of income for itself.
The short -term gaming book will appear when it has done for the Roku channel, the streaming service supported by Roku advertising launched in 2017. Roku earns more money when people watch the Roku channel instead of other services supported by advertising, it is therefore aggressively promoted its own service in almost every corner of its reception screen.
The company did not hide its plans to do the same for Frndly TV. “We will use [the platform] To drive Frndly, who is now part of Roku, “CEO Anthony Wood said during a call for results.
Think bigger
If all Roku does it with Frndly TV uses her home screen to peddle more TV subscriptions, it would be quite boring. And that may be the whole strategy. But my theory is that Roku will use Frndly TV as the first step towards the offer of a wider range of paid television channels.
Frndly TV, after all, is a niche in a niche, with channels that are largely focused on reality TV and reruns. It contains none of the first 10 wired channels and only eight of the first 50. None of these channels covers news or sports. At the end of 2022, FNNDLY TV had only 700,000 subscribers.
By entering the VMVPD sector, Roku instantly becomes a major player who can negotiate more and better quality transport agreements in the name of its 90 million households. It would be weird if these efforts began and ended with the programmer who has syndication rights for Colon And Blind.
An equally plausible result is that Roku extends its channel offers over time, taking advantage of the new will of television programmers to allow more flexible beams. He could then link these offers to his home screen and to his live television guide, with an integrated billing system to manage subscriptions. For people who still have a cable or who just want an easy way to access the wired channels, Roku could present themselves as the simplest solution.
I have always wondered why no streaming platform did it – I have Apple to do it in 2017 – and now Roku is in the best position to remove it.
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