Roku’s Big TV Hire: Can Charlie Collier Work ‘Mad Men’ Magic on Streaming Company’s Content Strategy?

Charlie Collier - Roku Media
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Charlie Collier, after more than two decades in broadcasting and cable TV, has jumped ship from the traditional television biz — betting that TV’s future is all about streaming.

As first reported by Variety, Collier is leaving his post as CEO of Fox Entertainment, departing from the Murdochs’ fiefdom to head up Roku Media, where he’ll oversee content and ad sales for the Roku Channel starting next month.

For Roku, recruiting the high-profile TV exec who brought such hits as “Mad Men,” “Breaking Bad” and “The Walking Dead” to the small screen can be viewed as a shift toward more strategic — rather than tactical — spending on original content. Not incidentally, Collier also is familiar with the content economics of the free-streaming space: Fox Corp. spent $440 million to buy Tubi in 2020, which has served as a monetization outlet for Fox TV programming.

The move signals that Roku plans to spend more on original content. Investors, who have soured on streaming stocks in 2022, don’t see that as a rallying point: Roku shares were down 1%-2% in early trading Friday following news of Collier’s hire, to new three-year lows, although that came amid a continuing decline in the broader market. (Year to date, Roku’s stock is off 74%.)

Collier’s mandate, essentially, is to drive up viewing hours of free, ad-supported content on the Roku Channel (and, by extension, boost associated advertising revenue). In Q2, Roku gained 1.8 million active streaming accounts, but overall streaming hours declined slightly from 20.9 billion in Q1 to 20.7 billion.

Partly, the flattening of the streaming curve is because it’s coming off COVID-era peaks. But the best way to ratchet up viewing time is with great, must-see original or exclusive programming, which is ostensibly right in Collier’s wheelhouse.

To date, Roku’s original content strategy has largely been opportunistic. The company paid some number less than $100 million for Quibi’s content library, in a fire sale after the Jeffrey Katzenberg-led startup went belly-up. That brought the Roku Channel shows including Kevin Hart’s “Die Hart” (renewed for Season 2) and Chrissy Teigen’s “Chrissy’s Court.” Roku also paid $98 million to acquire the company behind PBS mainstay “This Old House.” And it bought U.S. streaming rights to “Kids Ruin Everything,” a sitcom that was already a hit in Canada, and revived NBC’s “Zoey’s Extraordinary Playlist” as a Christmas movie special (which earned Roku two Emmy nominations).

To be fair, Roku has made some strategic content bets, including the pickup of “Weird: The Al Yankovic Story,” a spoofy biopic starring Daniel Radcliffe as the famed pop-music parodist, which premieres Nov. 4 on the Roku Channel.

Meanwhile, don’t discount Roku’s opportunity to expand its unscripted lineup. Fox’s biggest hit while Collier was at the helm has been reality-competition series “The Masked Singer.” Roku unscripted projects include co-production deals to develop shows featuring lifestyle and culinary personalities Martha Stewart, Emeril Lagasse and Christopher Kimball.

Roku execs have previously pointed to its relatively frugal content spending as a plus, pointing out that it doesn’t have a horse in the multibillion-dollar subscription VOD derby. But CEO Anthony Wood wouldn’t have hired Collier if he didn’t expect the company to take bigger swings to compete against the likes of Tubi, Paramount’s Pluto TV and Amazon’s Freevee.

In Q4 2021, the Roku Channel reached U.S. households with an estimated 80 million people, according to the company. The Roku Channel is available on (of course) any Roku streaming device, as well as Amazon Fire TV devices, Samsung Smart TVs, on iOS and Android apps, and on the web. The biggest gaps in its distribution matrix include game consoles, other smart TVs and Apple TV 4K; if Collier can assemble a more compelling slate of shows and movies available only on the Roku Channel, that could give the company leverage in cutting deals with those platforms.

Note that advertising and content partnerships drive the bulk of Roku’s revenue — and, effectively, all of its operating profit. (Roku manages its devices business at near break-even margins, with the goal of adding more active streaming accounts.) In Q2, Roku’s Platform segment, which encompasses ad and content revenue-sharing deals, increased 26% to $673 million. Despite the double-digit increase, that was lower than the company expected; Roku attributed that to marketers “abruptly” canceling or pausing ad spending in the back half of the period.

Ultimately, Roku’s recruitment of Collier underscores a narrative the company has communicated to Wall Street over the last several years: “We are focused on and continue to invest in a future where all TV and all TV ads are streamed,” as the streaming player said in reporting Q2 earnings. What that looks like under Collier’s stewardship remains to be seen — and it hinges on how much Roku is willing to spend to become a free-streaming category leader.