The film is part of Roku’s effort to persuade those who use the device to access paid apps like Netflix and Disney+ to spend more time perusing the free content offered on the Roku Channel, which now includes 40,000 movies and television shows and 150 linear channels. Keeping viewers on the platform longer is a way to bolster its advertising revenue for a business that has come to rely more heavily on ad spending and content distribution than device sales. Currently, device sales contribute just 12 percent to the company’s bottom line. Keeping users on the Roku Channel is imperative to its success.
David Eilenberg, Roku’s head of originals, said in an interview that the company’s strategy in this early phase of creating new content was to assure the creative community that when Roku takes on a new project, it will be willing to spend the money to support it properly.
“The spending strategy has always been surprise and delight rather than shock and awe,” he said. “‘Weird’ is a nice indicator of that, which is the sort of the thing nobody knew they wanted until it existed. That’s a very tricky thing to commission, but when you get one of those, you put both arms around it and support it to the best of your ability.”
Roku became a trending topic on Twitter at the end of July when it released the trailer for “Weird” as part of its upfront presentation, which the company says resulted in $1 billion in commitments from the seven major advertising agency holding companies for the upcoming television season.
Yet Roku’s expansion into originals comes at a difficult time for the company. During its second-quarter earnings call last month, the company pulled its full-year guidance because of the challenging advertising environment and lowered its third-quarter estimates to only 3 percent growth in total net revenues. (The analyst firm MoffettNathanson previously estimated growth for that quarter could reach 29 percent.)
The company has sought to assure investors that it won’t be laying off employees or changing its business strategy as it deals with the advertising slowdown. That hasn’t stopped some analysts from lowering their price targets for the stock, but most remain bullish on the company’s future as the connected television market continues to grow and consumers are increasingly interested in finding all their different streaming channels in one place (much like traditional cable).
Article source: https://www.nytimes.com/2022/08/22/business/media/roku-weird-al.html
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