Roku, Inc. (NASDAQ:ROKU) Q4 2022 Earnings Call Transcript

But we feel pretty strongly that the Roku TV program is the first — the Roku-branded portion of the program, which we just launched is additive to our overall business, and it will help us drive innovation as well as moving into higher end market segments. And so I don’t — so overall, it’s good. And then before I turn it over to Mustafa in terms of your question about how hard is it for OEM to switch to another TV OS. I mean, well, it’s very difficult, I would say, impossible to build a new franchise in TV OS at this point. I mean the amount of scale that you need. So you mentioned TVOD, for example. I mean, that’s — that’s not a significant player right now in TVOD and it’s hard for me to imagine that a new entrant would be able to gain the necessary scale and technology and just size of the of everything that’s needed to be in that business would be quite difficult.

And then the big factor, of course, is the Roku brand. I mean we’ve been working on building our streaming brand for years, and it’s a great brand people love it. People go to a large number of our sales for devices don’t actually create new accounts. They go into existing households that are rough households, and they want another Roku device. So there’s a lot of barriers to entry at this point. So with that, let me turn it over to Mustafa to talk more about the Roku branded TV program.

Mustafa Ozgen : Yes, sure. Not to summarize Anthony. Overall, the world TVs will complement their successful Roku TV licensing program. and it will help us drive further innovation for both Roku and our also licensing partners and ultimately for the consumers. That’s what we’re really after. We want to build products that are great for the consumers. And historically, Roku has focused on TV software and some portion of the TV hardware. In terms of TV software, we not only provide the purpose-built operating system, but we actually provide the complete software that runs inside the TV, along with some hardware design to help reduce the cost. With local brand TVs, we expand our scope to complete hardware — and we have a chance now to innovate on the complete hardware side, including display and other areas of the TV, along with our software innovations, and we’ll have a chance to really tightly combine these innovations together to offer even better TVs to the consumers.

So we believe Roku Brand TVs will be edited to our overall product offering for consumers. They will enable us to further grow our leadership position in the market. They will allow us to expand into the higher-end spectrum of the performance TVs which are occupied by a few brands today. So this will allow us and go licensing partners to really capture some market share in the higher-end segment. So overall, we are excited to bring the first generation TVs to the consumers in the spring.