Roku has launched “Howdy,” a new ad-free subscription streaming service priced at $2.99 per month. The service aims to meet consumer demand for affordable, uninterrupted entertainment by offering thousands of hours of content from partners including Lionsgate, Warner Bros. Discovery, and FilmRise, in addition to select Roku Originals.
This strategic move introduces a new potential revenue stream for Roku, whose investment outlook has traditionally centered on expanding its active user base and recurring platform revenue. While the low-cost subscription service could increase user engagement, it does not immediately offset the company’s core dependency on advertising for earnings and cash flow.
In a related development, Roku recently announced a significant partnership with Amazon Ads. This collaboration enhances audience targeting capabilities across 80 million U.S. connected TV households, reinforcing Roku’s value to advertisers and strengthening its competitive position. The integration is a key catalyst for generating high-margin advertising revenue, which supports both short-term performance and long-term profitability goals.
Looking ahead, Roku projects it will reach $6.1 billion in revenue and $372.1 million in earnings by 2028. This forecast relies on achieving an average annual revenue growth rate of 11.4% while reversing its current reported earnings loss of $61.5 million. However, despite these promising initiatives, the company continues to face the risk of intensifying competition from major industry players like Amazon and Google.
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