Roku reported that it reached $1 billion in revenue from its platform business for the first time in Q4 2024. This includes sales from subscriptions and advertisements on Roku devices. The company attributes the growth to an increase in streaming hours, a user base of nearly 90 million household, and strong advertising demand, particularly in political ads. Roku’s hardware sales have declined, with the company losing $47 million in device revenue. However, the company considered profit from its platform sales a substantial offset.
Market Impact
Particularly with the broadening influence of advertising on streaming services, platforms and portals stand to become a stronger force, compete for ad dollars, and drive new revenue streams through transactions. For 65% of households, Roku, Samsung, and Amazon are the most-used connected TV (CTV) platforms, with Roku in the lead. Unlike Amazon and Samsung, whose ecosystems are tied to broader hardware and retail businesses, Roku remains singularly focused on refining its CTV experience, leveraging its home screen to drive ad revenue and engagement.
With advertising becoming a key revenue driver for streaming platforms, major players like Google (YouTube), Disney (Hulu), and Netflix are expanding their ad-supported offerings, which will only intensify competition for ad dollars. Roku’s ability to secure a 25% year-over-year growth in platform revenue despite this crowded landscape shows that its integrated content strategy is proving successful, particularly the growing success of The Roku Channel. Parks Associates' research reveals 64% of Roku users who watch FAST also watch The Roku Channel and 41% of all Roku CTV users watch The Roku Channel. By offering free, ad-supported content, Roku continues to capture a growing audience segment that prefers cost-free streaming, making it an attractive destination for advertisers.
The battle for ad spend, however, is only one piece of the equation. Streaming media players retain a significant role as the primary streaming device for about a third of households, but smart TVs have now emerged as the preferred choice for most viewers. Roku’s ability to expand its smart TV presence, both through partnerships and its own branded TVs, will be critical in 2025 and beyond.
Parks Associates is a market research and consulting firm. Founded in 1986, Parks Associates provides business intelligence and research services through its proprietary methodologies developed over decades, including quarterly surveys of 10,000 internet households. The company's expertise crosses many industries: home security and smart home, streaming video, broadband and pay-TV services, digital media and platforms, gaming, Wi-Fi and home networks, connected health, support, consumer electronics, home control systems, energy management, and tech solutions for the multi-dwelling (MDU), small-to-medium business (SMB), and commercial building markets.
