Market Overview

Roku CEO: 'Everyone Over Time Is Going To Shift Toward Streaming'

Roku CEO: 'Everyone Over Time Is Going To Shift Toward Streaming'

Roku Inc (NASDAQ: ROKU)'s post-IPO lows of $15.75 had many investors concerned with the streaming media company's true prospects and short sellers were very active in the name. But the company's third quarter earnings report helped boost the stock higher by more than 40 percent Thursday and another 20 percent on Friday.

The Executive

Roku CEO Anthony Wood.

The Pitch

Roku's third quarter earnings report delivered on "all fronts," especially the advertising segment and TV program, which bodes well as TV viewers continue migrating toward streaming options, Wood said during CNBC's "Squawk on the Street" segment Thursday.

During Roku's third quarter the company realized a 48 percent growth in active accounts which it was able to monetize through advertising, he said. That is the core of the Roku platform business and accounts for more than 90 percent-plus of total gross margins, Wood said. Roku's hardware business saw only a 4 percent sales growth, but this side of the business is used to "build up active accounts," the executive said — and the actual number of player units sold in the quarter rose 35 percent.

What's Next?

The world of media and entertainment is undergoing a "tectonic shift," Wood said. "Everyone over time is going to shift toward streaming."

Over the same time period, advertising dollars will follow suit away from traditional TV platforms toward streaming providers, he told CNBC. 

Related Links:

Analyst Says Roku's Post-Earnings Bump Won't Last

Roku Impresses With First Publicly Reported Quarter

Posted-In: advertising Anthony Wood CNBC Cord Cutting entertainment media streamingMedia Best of Benzinga


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