Despite being a turbulent year marred with political and economic instability, 2020 was still a pretty good year for Roku
With millions of people at home during the Coronavirus Pandemic lockdowns, the entire streaming industry received a significant boost, with subscriber numbers going up across the board. The pandemic also came at a time when many consumers are straying away from traditional cable and satellite TV in favor of streaming, serving to speed up purchases of subscriptions and equipment, such as Roku. Thanks to the "streaming boost" and the ongoing trend of "cutting the cord," Roku was able to surpass 50 million active subscribers, reaching 51.2 million active users by the end of 2020. According to Roku's press release, those users streamed a whopping 58.7 billion hours of content, a 55% rise year over year.
"There is an ongoing TV streaming trend of how consumers are choosing to watch the content they love. Nearly one-third of U.S. households have cut traditional pay TV, according to Roku's 2020 cord cutting study. Furthermore, eMarketer predicts that by the end of 2024, fewer than half of U.S. households will subscribe to a traditional pay TV service," Roku said in the release.
If the subscriber numbers weren't enough, Roku also wound up as the #1 smart TV system in the United States and Canada. Roku's lineup of streaming boxes and the wide variety of Roku capable smart TVs on the market handed the company a considerable market presence and made it an attractive purchase for cable-cutters, as it allows users to not only view free Roku channels but also allows them to stream other services such as Netflix
To cap off Roku's stellar year, the company also acquired distribution rights for Quibi's content. Passport to Wall Street readers will likely be familiar with ill-fated Quibi, whose rise and fall was well documented. Quibi, aside from its short life, was notable for its short-form content, which was intended to be ingested in short bursts. Roku has made Quibi's unique content available for free to its users in an ad-supported format, including new shows that will be available to stream for the first time through Roku.
Roku's announcements were fantastic for its share price. On January 6, when Roku announced its subscriber numbers for 2020, shares trended up, ending the day 4.9% up. Roku's stock continued its upward trend into Friday, when it announced its ascent to the #1 smart TV OS and that it had acquired Quibi's content. Shares were up 2% by the day's end on Friday and were up a considerable 17% for the week.