TV Will Not Be the Victim as Dollars Shift to Streaming

For the first time, Google's YouTube revenues surpassed those of Netflix. The YT team took in a record $8.63 BN in advertising spend in Q4 2021, besting Netflix, which saw $7.1BN in subscription revenue in the same period. Netflix for the full year of 2021 still was the lead revenue generator but this too will change.

Roku is seeing challenger brand Amazon take share as the Amazon TVs flood the market. Amazon will no doubt win this war. Of course, I call them a challenger brand in jest. Roku's stock has already taken a hit and I expect them to see some rough days ahead. They are an incredible platform (one which I use in fact in a couple of rooms), with one of the easiest to use UI's, but we are talking about Amazon and Google here and when they put their minds to owning something, they generally deliver -- as already evidenced above in Google/YT revenue growth.

Roku recently recently announced they will accept Nielsen Digital Ad Ratings (DAR) to boost revenue and I do expect they will see some short-term wins by doing so, but their lack of transparency to where you are running, regular fraud attacks and simple pressure from Google, Amazon and NBCU Comcast may simply be too much in the U.S. market. That is not to say they lose internationally, but Google and Amazon also have their eyes on continued global growth.

Why is this change happening from a consumer perspective?

It comes down to ease and trust. Google and Amazon are trying to take over the home and own home automation. Roku is a one trick pony, and while they are integrated or offer integration options into some home automation solutions, consumers are simpleminded when they make choices like this. I expect Google and Amazon to "make it easy" to control the TV and audio experience and have it integrated into the rest of their home solutions. If I am right, it is merely a matter of time for Google, Amazon (and oh, did I fail to mention Apple?) to take over the living room and every other room in the home.

How should the media industry react? Honestly, this too is a simple answer: Buy the audiences on all platforms and do so with frequency management and fraud protection. If you follow the eyeballs, no matter what platform they choose, you will see success.

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