A really good look back (and forward) at Roku by Alex Sherman. Everyone seems to forget about their history within Netflix, before spinning out. But also the near-acquisitions by Amazon and Intel.
The spin-out call by Reed Hastings was absolutely the right one at the time (and I think you could argue still is, given there “be everywhere” strategy), but this has to sting just a bit:
So Hastings decided to spin out the division to Roku. Wood received an unfinished device, patents, 20 to 30 Netflix employees (more than doubling the size of Roku) and some cash. In return, Netflix received about 15% of Roku’s equity.
Netflix would later sell its Roku shares to venture capital firm Menlo Ventures to avoid the perception of being conflicted by favoring one streaming distribution manufacturer over another. When Netflix sold its stock in 2009, it claimed a $1.7 million gain on a $6 million investment. If Netflix had held, its stake would be worth nearly $7 billion today. Roku has been one of the pandemic’s big winners. Shares have have gained more than 480% from March 17, 2020, as the media world shifted to focus on streaming video. Today, Roku’s market capitalization is more than $45 billion.
Also, love this quote from founder and CEO Anthony Wood:
“Many companies just don’t really understand the attitude people have when they’re watching TV. People want to sit there, drink their beer, and watch TV.”
It’s such a perfect quote because it summarizes what Roku has done so well over the years: not overthinking it. From a design, UI, and content perspective, Roku is not my cup of tea. But I get that it is many
peoples’ cups on tea. The price point and availability are right. Unlike, say
, the comically expensive
, but nice
Apple TV. That matters a lot
, as it turns out.