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ROKU Partners With NBCUniversal Ahead of 2020 Tokyo Olympics

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Roku, Inc. ROKU has announced a partnership with Comcast Corporation CMCSA-owned NBCUniversal just ahead of The Tokyo Olympics 2020 to provide an exclusive event experience to its users.

Roku platform streamers can now easily access NBCUniversal’s more than 5000 hours of Olympics coverage from the home screen directly. This enables Roku users to get access to the detailed coverage of the Olympic Games through the NBC Sports or Peacock channels on Roku devices between Jul 20 and Aug 8, 2021.

The increasing popularity of the Roku channel and significant expansion of the portfolio of TV-brands and third-party streaming channels are expected to have led to 25.7% jump in the company’s share price in the year-to-date period. The Zacks Broadcasting-Radio/TV industry has rallied 7.1% over the same time frame.

Year to Date Performance

Zacks Investment Research
Zacks Investment Research

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Growth in User Base Attracts Advertisers

Roku generates major revenues from digital advertising sales, content distribution services along with premium subscriptions and sale of branded buttons on remote controls.

As of Mar 31, 2021, active accounts totaled 53.6 million, up a whopping 35% year over year. Along with this, a 49% year-over-year increase in the streaming hours propelled a significant growth of 101% in the platform revenues for the three months ended Mar 31, 2021.

This has attracted advertisers to its streaming platform and is expected to aid top-line growth in the near term.

Through this Zacks Rank #3 (Hold) company’s recent takeover of Nielsen’s Advanced Video Advertising business for $39.1 million, Roku added video automatic content recognition and dynamic ad insertion technologies to its portfolio.

Roku’s advanced advertising capabilities, along with continuous shift of advertising budgets toward streaming TV, are expected to remain the key advertising revenue drivers.

The company is looking to acquire and retain more and more users, along with proper monetization of its streaming platform.

However, the business of TV streaming is severely competitive and global in nature. The well-funded companies with stronger brands such as Amazon AMZN, Apple AAPL have more extensive line of products.

Nonetheless, Roku recently partnered with TCL Electronics to enable its users in the U.K. to experience TCL Roku TV in HD as well as 4K UHD, price starting at €229.

Moreover, the debut of 30 Roku originals including Die-Hart, #FreeRayshawn etc. award-winning series along with documentaries such as Blackballed, Big Rad Wolf on its channel is expected to aid active user growth.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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