Media and tech firms keep entering the platform revenue business.
As Variety Intelligence Platform’s exclusive subscriber report “Connected TV Competition” details, a combination of advertising and a share of subscriptions made to streaming services are presenting rich new revenue streams for companies in the connected TV and device space, including Roku, Google, Apple, Amazon, Samsung and many more.
Roku is an excellent case study of why there is so much attention currently being paid to the connected TV space. The company has seen quarterly revenues from platform revenue increase from $75.1M in Q1 2018 to $582.5M in Q3 2021, an increase of $507.4M (+676%).
Most of this is driven from the cut Roku takes from subscriptions made on its devices and TVs running the Roku operating system, with the share from advertising on free streaming services estimated by VIP+ as being significantly less.
VIP+ partnered with the strategy team at marketing agency Trailer Park Group to assess consumer sentiment regarding which companies are positioned to succeed in this space. To see how all the brands vying for a share of platform revenue performed, as well as seeing the data among 18-40 and 41-66 demographic cuts and the barriers to making subscriptions that fuel platform revenue, subscribe to VIP+ for access to the full report.
Amazon has the strongest ratings across four of the five metrics VIP+ and Trailer Park identified as key to being used by consumers for platform revenue. They were second only to Netflix for comfort with subscribing directly to a SVOD service, reflecting the market Amazon has constructed with Amazon Channels. Bearing in mind that there are Amazon-powered connected TVs and devices in 3 out of 10 U.S. homes, the company is well positioned to keep reaping platform revenues in the future.
Netflix is ranked second among the 32 companies Trailer Park’s survey measured for trust and willingness with which to share and store credit-card informationand fourth for being prepared for the future (behind Amazon, Google and Apple). Most important, Netflix is ranked first for subscribing directly to a streaming service.
At first glance this isn’t surprising, it being an SVOD, but it does suggest that the company could position itself as a gateway to other — niche — services which themselves are positioned as additions to major streaming services and reap a rich platform revenue reward.
Google is the only company aside from Amazon and Netflix to see over half of those surveyed by Trailer Park Group say they trust the brand. It also performs better than all brands other the aforementioned duo for all metrics, save for subscribing to services directly, where it is also behind Disney and Hulu.
Honorable mentions go to Samsung, Microsoft, Apple and Disney, which also performed well in VIP+’s consumer insights but trail Amazon, Netflix and Google in platform revenue potential. The key takeaway from this data is that, Roku aside, the companies likeliest to reap the greatest rewards from subscription video-driven platform revenue are global tech firms.