[Overseas Stocks Spotlight] "Roku Expected to Benefit from Streaming Service Fragmentation"

[Asia Economy Reporter Eunmo Koo] There is an analysis that Roku (ROKU.US), a platform operator, could benefit as streaming services become fragmented.

On the 16th, Roku announced that it had signed a contract to supply Warner Bros.' streaming service ‘HBO Max’ on the Roku streaming platform. HBO Max is a new platform launched in May this year, currently with 12.6 million subscribers, about 1/7 the size of Disney+ and 1/16 that of Netflix.

Earlier this month, Warner Bros. announced that it would simultaneously release all major films scheduled for release next year, including ‘Wonder Woman 1984’ set to premiere at the end of this year, on both HBO Max and in theaters, making securing HBO Max on streaming platforms a hot topic. Amazon’s Fire TV, the biggest competitor, already signed a supply contract for HBO Max in November, and through this contract, Roku is expected to maintain its 33% smart TV market share by securing supply contracts with all major streaming services.

It is evaluated that the fragmentation of streaming services is creating a favorable environment for platform operators. Seungtaek Hwang, a researcher at Hana Financial Investment, diagnosed in a report on the 26th that “the streaming service market, which was dominated solely by Netflix, is rapidly fragmenting as major existing media companies such as Disney, Universal Studios, and Warner Bros. enter the market one after another.”

When Disney launched Disney+, it withdrew most of the content previously provided to Netflix and decided to offer it exclusively on its own streaming service. ‘The Office’ and ‘Friends,’ which ranked first and second in Netflix viewing time, will also be exclusively provided on Peacock and HBO Max, respectively, due to the launch of the original producers’ streaming services.

Researcher Hwang analyzed, “Market research firm Activate projected that the average number of streaming services subscribed to by Americans increased from 1.6 in 2016 to 2.6 in 2019 and is expected to reach 4.9 in 2023. This change is judged to benefit Roku, a streaming service platform that can manage multiple services at once.”