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Photo illustration: Axios visuals

Coming off of a stellar first earnings report as a public company, Roku CEO Anthony Wood says the future of Roku is smart TV software, not its connected TV hardware product that it's most commonly known for. Per eMarketer, more Americans use Roku's connected TV device than any other similar device, like Chromecast, Amazon Fire TV or Apple TV.

Why it matters: Just as mobile hardware companies like LG and Samsung eventually migrated off of their own software platforms to market leaders' like Android and iOS, the smart TV industry is going through the same evolution. Roku is priming itself to be the next big software platform for smart TVs. The shift creates new revenue streams for Roku that can be scaled very quickly, including software licensing and digital TV advertising.

  • "Our hardware business is meant to drive scale to our software platform," Wood told Axios. "We make most of our gross profit from our platform business." One in five of all all smart TVs sold were powered by Roku's operating system last quarter.
  • A whopping two-thirds of Roku's platform revenue last quarter came from video advertising served on ad-supported channels."TV advertising compared to the tech and techniques in digital is stuck in stone ages," Wood says. "We have a very advanced ad platform that gives advertisers the ability to use digital targeting techniques while leveraging the benefits of a TV advertising big screen."
  • The Roku Channel, an ad-supported movie and TV show network, just launched to support ads. A lot of people think streaming is about ad avoidance, but 40% of streamed viewing has ads in it," Wood says.
  • "Consumers looking for free content," says Wood. "People move to streaming to save money. We don't believe that they're going to replicate the amount they paid for cable with streaming. Rather, it will be a mix of SVOD (streaming video on demand) like Netflix, and free streaming options."

Note: This post has been clarified to show that two-thirds of Roku's platform revenue (not overall revenue) is from video advertising last quarter.

Go deeper

Mayors press Biden to adopt progressive immigration agenda

Illustration: Sarah Grillo/Axios

A coalition of nearly 200 mayors and county executives is challenging Joe Biden and the incoming Congress to adopt a progressive immigration agenda that would give everyone a pathway to citizenship.

Why it matters: The group's goals, set out in a white paper released today, seem to fall slightly to the left of what the president-elect plans to propose on Inauguration Day — though not far — and come at a time of intense national polarization over immigration.

Caitlin Owens, author of Vitals
12 mins ago - Health

Demand for coronavirus vaccines is outstripping supply

Illustration: Aïda Amer/Axios

Now that nearly half of the U.S. population could be eligible for coronavirus vaccines, America is facing the problem experts thought we’d have all along: demand for the vaccine is outstripping supply.

Why it matters: The Trump administration’s call for states to open up vaccine access to all Americans 65 and older and adults with pre-existing conditions may have helped massage out some bottlenecks in the distribution process, but it’s also led to a different kind of chaos.

Woman who allegedly stole laptop from Pelosi's office to sell to Russia is arrested

Photo: FBI

A woman accused of breaching the Capitol and planning to sell to Russia a laptop or hard drive she allegedly stole from Speaker Nancy Pelosi's office was arrested in Pennsylvania's Middle District Monday, the Department of Justice said.

Driving the news: Riley June Williams, 22, is charged with illegally entering the Capitol as well as violent entry and disorderly conduct. She has not been charged over the laptop allegation and the case remains under investigation, per the DOJ.

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