Roku makes great products. It has the easiest operating system to learn and offers an environment of equal opportunity for streaming partners with lots of great content finding features. But After 12 or so years of building from the ground up, it has finally made a serious mistake.
Roku went into the holiday shopping season without HBO Max in its lineup.
Yeah, I know. Some people feel like HBO Max is too expensive compared to other streaming options. Some don’t like the programming in general. That’s fine. But at this point with Amazon on board with the service, Roku looks like it is leaving itself and its customers out in the cold for what could be a very hot December and January. Roku is unlikely to lose customers/active accounts, but with publicly traded companies not growing may as well be a full decline. And despite some excitement built on rumors propagated from an article or two from a few hot new faces at the lunch table Roku has managed to keep HBO Max at least 6 feet away during the entire pandemic-fueled streaming boom.
Why could this be a problem moving forward?
HBO Max is about to be at the top of the conversation not just with cord-cutters but all consumers, including those with HBO through cable and people who desperately miss new content. Right now at the minimum, HBO Max will be the home to Wonderwoman 1984 starting on Christmas day. That means anyone who thinks that would be a great way to break up the holiday and looking to get a new streaming box can not get a Roku powered TV or device unless they already have something else that will deliver the app. Given the choice between a Fire TV Stick or a Roku Stick+ if HBO Max is a factor the answer is simple. And while Roku’s share of the marketplace is its biggest calling card, HBO Max’s over 30 million potential customers may have a say in the future of the market. Yeah, Wonder Woman 1984 is a comic book movie. And you hate comic book movies right? Well, the last one
made nearly 100 million dollars in the theater. So, there are obviously a lot of people who don’t care if you like it or not. It will be home to a new version of The Justice League helmed by Zack Snyder as well. DC Fandom is nothing to blow off lightly. And the thing is, that even if Roku adds the channel today or tomorrow, it did not have it during Black Friday or Cyber Monday. There is a conversation being had in the industry that Legendary’s King Kong VS Godzilla could be making its way to HBO Max as well. With release schedules still up in the air for every other major film and few distribution channels few for every company not named Disney or Comcast HBO Max could be poised to be in the kind of position it was in the 1980s. The unquestioned home of premium entertainment.
If Roku begins to build a reputation as the last platform to get services or worse if people start to see it as anti-consumer (fair or not) it could wilt on the vine. It defied the odds for a decade as a startup that started sprinting before potential competitors even realized there was a race. People said for years that Apple would overtake it, or Amazon Fire TV would be a “Roku Killer”. But because Roku has always been seen as an agenda-free platform that gives everyone a shot to be found with easy to use features it has cemented its place. Being first to the market makes a difference. But these devices and platforms are like big box stores for internet content. If a store begins to have problems getting items in stock you will start shopping somewhere else.
This missing content problem will get worse as things wind on. I never in a million years thought that Roku would go into December without having an HBO Max deal in place. But here we are. That means that the company could go into January or February without one as well. If HBO Max can hit its stride and or prove that the availability of the service is driving sales of its competitors the conversation will be a lot different when it comes to revenue. Even worse, if Roku begins to have more trouble with partners from a weaker position, it could lose access to more than TV everywhere options like the Fox situation last year before the Super Bowl.
Roku should tread carefully going into 2021. This year has accelerated the entire streaming industry and lifted a lot of boats along the way. And the more oxygen platforms like Android TV/Google TV, Apple TV, Fire TV get, the more of a threat they are. Roku’s Mjölnir is its market share. It can’t begin to recede. Amazon is sitting right there waiting to scoop up whatever gets washed away.