Anthony Wood : This is Anthony again. I guess I would just add that if you look at this — if you look at licensing programs in other — the other companies have in adjacent industries and compare that to Roku TV, I mean it’s very common for a program to have both first-party and third-party devices in the program. If you look at, like, say, Android phones, for example, Google makes the Pixel Phone or if you look at Windows operating system, Microsoft makes the surface line of laptops and tablets. And brands and companies do this because it gives our consumers more choice. And it really helps drive innovation as you understand better the integration of the hardware and the software, and that results in more innovations and those innovations roll out to licensing partners as well.
Operator: The next question I have is from Thomas Forte of D.A. Davison.
Thomas Forte : So first, at a high level from a P&L standpoint, can you explain the differences in sales and margins for Smart TVs sold with Roku’s operating system and a Roku branded Smart TV. And then second, as you lower your OpEx growth rate, can you talk about your investment sending priorities, including in content, hardware and international expansion.
Anthony Wood : Steve can take the first question about the P&L and then I can talk about investment priorities after that.
Steve Louden : Yes. Tom, in terms of the how the P&L treatment works for the Roku TV program. Currently, we — with our licensed TV program, obviously, our partners are selling the TVs themselves. And so no revenue or COGS from that sale is on the P&L. There is a small amount of TV licensing OS licensing revenue on the P&L that’s now in the Devices segment, but that’s really inconsequential. And so really what — when you think of the broken branded TVs, what you’ll think of is they’ll get treated similarly to the players. So you’ll have revenue you potentially have some contra-revenue there. You’ll have the COGS and the gross profit and then associated expenses with that program in OpEx as well. And so it will be very much like the players.
That’s part of the reason that we changed the Player segment named to Devices, and then we align some other small things to be consistent with the organization change we made when we added the three presidents and Mustafa runs the broader devices universe.
Anthony Wood : Thomas, so in terms of areas of investment, I’ll provide some color on that. And then when one of the ones you asked about was content spending, and I’ll turn that one over to Charlie. So the here is — some of the key areas we’re investing in, obviously, the Roku TV program super successful for us, and we continue to push that forward, including with Roku-branded TVs, which we just talked about. The ad platform is an important asset of ours, our streaming ad platform. And there’s different areas we’re investing there. One, I guess, just one I might call out and highlight is improving integration of ads and promotions throughout our home screen and our home screen experience. which is a big area of differentiation for us, which is 70 million households starting there TV journey every day when they watch TV by turning on their Roku TV and starting at our home screen, there’s lots of opportunity for things that we can do there and maybe at some point, Gidon will get a chance to talk about that.
