Roku has vehemently denied an anonymously sourced Digiday report that it is meeting with media companies to discuss making original shows.
“We are not working on originals,” a Roku rep told Next TV in an email exchange this morning.
To date, the conventional wisdom has been the that advertising-based video-on-demand (AVOD) business models don’t work for expensive original series strategies.
However, Digiday makes the case that mere talks with the Hollywood studios aren’t out of the question. AVOD competitor Vudu (owned by Walmart) has been working on an originals strategy for several years. And in another anonymously sourced story that was posted in late February, Digiday reported that Amazon’s IMDb TV platform is looking to pay as much as $500,000 per episode to join the original series arms race.
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Roku took in $411.2 million in ad revenue in the fourth quarter, up 49% year over year and beating Wall Street expectations.
A key generator of that revenue has been AVOD platform the Roku Channel, which features licensed movie content from the major studios, along with carriage of various digital content channels from third-party providers.
As Digiday noted, it’s not getting any easier for a platform to stand out with splashy, expensive original shows, not with Apple TV Plus, Disney Plus, Peacock, HBO Max and Quibi all joining the subscription streaming race within the current six-month period.
Notably, Facebook and YouTube have recently pulled back on ambitious original series plans.
With Netflix projected by BMO Capital Markets to spend $17.3 billion this year on originals, there’s a go big or go home mentality these days to entering the originals market.
“If you’re spending under $1 billion on originals, then you’re not really in it,” an unnamed entertainment executive told Digiday.