Roku (NASDAQ:ROKU) is expected to unlock significant growth in the next five years via software licensing. By 2025 the media streaming company will be different as the company management has indicated that this will be a streaming decade.
“Streaming decade” just came early than anticipated
Last year the company unveiled its vision of what the streaming decade could be like. In a statement, the management of the company had indicated although streaming is becoming mainstream it still accounts for a small fraction of TV viewing.
The streaming market will continue to grow and become competitive especially in terms of software and hardware provision which fits Roku. In the next four years the company is predicting that almost 50% of TV households across the US will not be using cord and cable services with most of them stopping subscriptions to the services.
This will be around 60 million never-cable and cord-cutters according to Nielsen’s survey of 120.6 million TV households. By the end of last year there were around 83 million subscribers of satellite and cable services with only around 38 million subscribers without cable. In the first quarter pay-TV services lost 2.2 million subscribers as people turned to media-streaming services such as Netflix (NASDAQ:NFLX).
Roku to leverage streaming software licensing for growth
The exodus is a sign of good times ahead and it seems Roku’s vision is materializing faster than expected. Roku is unlikely to make changes to its business strategy in the next five years since it is already an industry leader in the streaming media hardware. Already TV manufacturers are turning to Roku for licensing of the software platform.
Therefore software licensing will be the company’s growth strategy going forward despite there being other options for TV makers such as Alphabet’s (NASDAQ:GOOGL) Android TV. The good thing with Roku is it is a seasoned performer in the industry and its robust revenue growth will continue as the company’s provisions become important in streaming space.