1.Roku Still Rules The Streaming Roost

A new study from Parks Associates reaffirmed Roku’s position as ruler of the streaming roost: the scrappy independent controls 37% of the market, same as last year.

Amazon’s Fire Stick is in second place, with 28% of the market (up from 24% last year), while Google’s Chromecast slipped into last place with just 14%, down from 18% in 2017, allowing the seriously overpriced Apple TV to move up into third position, with the same 15% market share it had last year.

And because visual representations are always helpful, here’s what it looks like charted out in bright vibrant colors:

 

Why It Matters

There are a number of reasons why Roku is of interest.

First off, they have made advertising the key piece of their revenue stream, with ad revenue surpassing what they get from the sale of their devices.

They’re also the Switzerland of devices, as they play nicely with everyone. This shouldn’t be that big a deal, but Apple was beefing with Amazon until a few months back and Amazon is still beefing with Google, not letting the official YouTube app onto Fire TV.

There’s also the fact that consumers seem to like the Roku better than its competitors. (We’re not making that up, it’s one of Parks’s findings. The only usability categories Roku lags in are gaming and the ability to purchase content, where Apple TV has the lead. Given that Apple actually sells games and content however, that’s probably not the least bit surprising.)

Now what’s really interesting about that last point is that while consumers might like Roku better and have given it a wide lead over other devices, there is one group that’s not a fan of Roku: developers. They are not the least bit pleased with Roku’s proprietary, built-on-Linux platform, which is why you will often seen OTT apps and new features for existing apps released on other, less popular platforms well before they appear on Roku. Providers are not doing the TV equivalent of seeing if they wow them in Peoria. They’re just giving in to the developers.

What You Need To Do About It

Keep in mind another stat from the Parks report: OTT devices are now in 40% of U.S. broadband homes, up from a mere 6% in 2010. Factor in the number of people who eschew those devices for their smart TV interfaces and you have about half the country, the same number who use DVRs. Those folks are likely to be leading the “cord shifting” revolution, getting their TV via vMVPDs and other OTT providers because it’s easier and because (repeat after me) the interface is easy to use, intuitive and doesn’t feel like it was designed sometime in 1998.

That means it’s time to get your act together on OTT advertising, OTT apps and why vMVPDs are likely to be the way consumers want to go, given how much easier it is to have everything in one place and a single interface and single bill for all your TV entertainment.

It’s also why you need to push back on your tech team about Roku. It doesn’t matter if everything they say about it is true. What matters is that most of your users are on it and that’s going to be an issue if they don't have access to all those new upgrades you just promised them.

 

2. Time-Warner’s “Failing Firm” Defense

The legal community has been focusing on the post-trial arguments from AT&T and the DOJ this week, especially AT&T’s claim that mergers of this sort are necessary in order for legacy media companies to compete with the likes of Facebook, Apple, Amazon and Google. (Netflix always gets lumped in with those four, but their business model is far less diversified and on far shakier ground … and they have much less money than the other four, so we’ll stick with "GAFA" rather than "FAANG", even though the latter acronym is much catchier.)

The DOJ’s counterargument is that the “failing firm” defense has rarely been accepted as a valid reason to allow something that violates antitrust regulations, or to quote their brief, “AT&T and Time Warner seem to be asking the court to find a new defense to an illegal merger.”

Ouch.

Why It Matters

The need to defend itself from GAFA is the lynchpin of AT&T’s argument and if Judge Richard Leon doesn’t buy into that, it could push him to deny the merger, which would then set off a chain event in the industry around all the other potential mergers.

Maybe.

Most of those (Fox-Disney, CBS-Viacom) are horizontal rather than vertical mergers and the DOJ shouldn’t have much of an issue with that, as the resulting entities will not have much of an advantage, given the overall number of players in the industry. (Though a “no” ruling would shut whatever door Comcast might have had into Fox.)

There’s also the fact they just let Discovery-Scripps go through, which would seem to prove out the vertical versus horizontal merger point.

What You Need To Do About It

Not much you can do at this point other than get out the popcorn and wait for the verdict, which is expected on Tuesday, June 12th, just in time for both Promax DBA and TV of Tomorrow, two shows I will be speaking at next week. (Slid that one right in there, lol.)