Over the past few years, Roku (NASDAQ:ROKU) has been growing its smart TV market share and this has been one of its biggest strengths. According to the company, its smart TVs account for over 30% of TVs sold in the US, and in Canada, it accounts for around one-quarter of smart TVs offered.
Will manufacturing partnerships with Roku last forever?
There are hover concerns regarding how long the company will keep its partnerships with key manufacturers. In a note, to investors, Stephens’ Kyle Evans raised his doubt regarding the partnership with TCL which is the largest manufacturing partner of Roku. Roku has benefitted massively from the heavy lifting of TCL despite not sharing advertising revenues.
Similarly, the company has affirmed that it will not be offering revenue sharing to its partners. As a result, Evans feels that TCL and other manufacturers may turn to Google’s (NASDAQ:GOOGL) Android TV or Amazon.com Inc.’s (NASDAQ:AMZN) Fire TV if Roku refuses to share some of its revenue with the manufacturers.
According to the analyst, the partnering of TCL with other software developers might lead to TiVo-like issues for the company. TiVo surrendered market dominance in the DVR sector after pay-TV companies began providing their DVR boxes as part of the subscriptions.
Roku still has an edge over rival smart TVs
But the Roku smart TV is hard to copy especially the ecosystem of channels as well as the Roku channel. Competitors such as Amazon Fire TV do not have many channels compared to Roku and have left large names out of the platform. The diversity and inclusion of big names make it attractive.
The company has been growing its user base which attracts media companies. It is unlikely that a manufacturer moving to another smart TV platform will have the same impact as what Roku offers. Most importantly Roku works with retailers to bring products of manufactures to stores which are important when it comes to sales.