More than a decade after being beaten by TiVo, Anthony Wood became a billionaire with cheap streaming gadgets. That business has never turned a profit. Roku is now betting its future on advertising
Image: Timothy Archibald for Forbes
More than a decade after being beaten by TiVo, Anthony Wood became a billionaire with cheap streaming gadgets. That business has never turned a profit. Roku is now betting its future on advertising
DVRs and Netflix have taught a generation to hate television commercials. Anthony Wood should know—he created one of the first DVRs that allowed viewers to skip commercials, and he also worked briefly at Netflix, directly under its co-founder Reed Hastings. But Wood’s latest pivot, in the midst of the streaming media revolution, has been to bet the future of his streaming device company, Roku, on the very thing consumers are said to loathe: Advertising.
It’s a necessary pivot. Roku’s original business, selling inexpensive dongles that let TV viewers tap into the internet to stream 500,000 movies and TV episodes from Netflix, Disney and many more, is a low-margin one that has never turned a profit. Even worse, streaming has become a commodity, with streaming apps integrated into anything that can get online, from PlayStation consoles to tablets to smart TVs.
Wood, 54, is now betting that Roku will be able to move beyond its hardware business into a more lucrative software business: Measuring the reach and effectiveness of ads on streaming apps.
“Traditionally, the only way you would measure a TV ad is through Nielsen ratings, which could tell you roughly how many people have watched it,” Wood says. “Our measurement is very precise, where we can tell a company that out of everyone who saw your ad, 5 percent went to your website and bought something,” he explains. “We’re bringing the sort of technology that’s already been around for a while on the internet to the TV world.” Roku does this with in-house measurement tools, but also with 11 partners including New York-based Nielsen in order to tell advertisers like clients Jaguar Land Rover and Baskin-Robbins how their ad campaigns performed against which demographics.
(This story appears in the 28 February, 2020 issue of Forbes India. To visit our Archives, click here.)