Roku, Inc
Roku, Inc. is an American electronics company founded in October 2002 and headquartered in Los Gatos, California. Initially focused on media players for audio and video files, Roku gained prominence by enabling older televisions to access streaming services like Netflix. By the mid-2020s, the company evolved to sell televisions preloaded with its software, making streaming more accessible without the need for additional hardware. Roku played a pivotal role in popularizing streaming in the U.S., catering to a demographic that may not have otherwise engaged with digital media due to technological barriers.
The company was founded by Anthony Wood, who previously contributed to the invention of the Digital Video Recorder (DVR). His experience at Netflix helped propel Roku’s early success, particularly with devices that facilitated streaming services. Over the years, Roku expanded its offerings, introducing various media players and streaming sticks, culminating in the launch of their own smart TVs. By 2024, Roku had achieved significant milestones, boasting 85.5 million households streaming content and becoming a leader in advertising-based video on demand. Despite facing challenges, Roku continues to thrive, showcasing its ability to adapt and grow within the dynamic streaming market.
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Roku, Inc.
Company information
- Date Founded: October 2002
- Industry: Streaming media and electronics
- Corporate headquarters: Los Gatos, California
- Type: Public
Roku, Inc. is an electronics company that originally made media players for audio and video files. The company then provided a way for older televisions to access Netflix’s streaming service. By the mid-2020s, Roku had grown substantially and sold televisions preloaded with its software, eliminating the need for external hardware when accessing its products. Roku, Inc. helped popularize streaming throughout the United States by bringing the service to a new demographic, eventually leading to the rise of Netflix, Hulu, and other large streaming companies.
History
Roku was founded by billionaire investor Anthony Wood. Throughout elementary school, Wood enjoyed building tree houses and working with his hands. By high school, Wood had begun to teach himself programming. He quickly began writing software and then began using his new skills to develop new business ideas.
During the late 1990s, Wood played a significant role in the invention of the Digital Video Recorder (DVR). At the time, households across the world primarily watched live television broadcasts. People who wished to record live television had to use physical media to record small segments of programming. DVRs allowed users to digitally store large quantities of media on a single device, allowing them to easily view television programming at their own convenience. Woods labeled his brand ReplayTV, and successfully grew his company.
ReplayTV faced heavy competition from television companies worried that easy access to recording would allow viewers to skip valuable advertisements. It was also forced to compete against TiVo, another large company that used DVRs as its primary commercial offering. In 2001, Woods sold ReplayTV to SONICblue. Though the DVR market proved profitable, SONICblue struggled, eventually going bankrupt. Woods founded a new company the following year called Roku.
Initially, Roku designed media players, which were used by computers to play audio and video files. However, early in the twenty-first century, Woods began to suspect that the process of streaming audio and video files from one location to another would eventually become a profitable market. He became involved with Netflix, a company that offered mail-based rentals for DVDs and video games. Woods quickly rose to vice president within Netflix and began working on the company’s secretive “Project Griffin.” This project would eventually move Netflix away from renting physical media and instead allow users to directly stream media from Netflix’s servers to their screens through the Internet.
In December 2007, the official Netflix player was almost ready for a commercial launch. This device would allow users to pay a subscription to stream from Netflix’s database of movies and television shows. However, Netflix leadership was concerned that developing and selling proprietary Netflix hardware would lead to retaliation from other hardware manufacturers. To avoid this backlash, Netflix contracted the creation of such a device to Woods’ company, Roku.
For Netflix, the company first developed the Roku DVP N1000 device, which allowed users to access Netflix’s “Watch Now” streaming service. The initial device allowed users to stream in both standard definition and high definition, though not all media was initially available in high definition.
In the long term, Netflix hoped to allow its software and streaming service to be packaged directly with most new electronics, including gaming consoles and smart televisions. However, Roku’s device enabled Netflix to target consumers who were not likely to upgrade their electronic equipment regularly. The device was simple to install, plugging directly into the television, and was affordable for many consumers. Additionally, its ease of use allowed Netflix to market its services to consumers who might be intimidated by upgrading to state-of-the-art equipment.
Roku’s first player proved popular, and in 2009 the company expanded its offerings by launching two additional players. These included the Roku SD and the Roku HD-XR. The Roku SD was cheaper than the company’s previous hardware, allowing people on a tight budget to access streaming. The Roku HD-XR contained higher-quality hardware and was marketed as Roku’s premium device. Soon, Roku began offering other streaming applications on its devices, allowing consumers to purchase one device and access a variety of new services for their televisions. In 2011, Roku launched its second generation of players, each offering updated hardware and additional features.
Roku launched its streaming stick in 2012. This device included many features of Roku’s previous offerings but was condensed into a small dongle plugged directly into the television. This device drew small amounts of electricity directly from the television, so it required no external power source or setup. In 2014, Roku began selling televisions, each preloaded with Roku streaming software. Roku then continued to expand its consumer offerings, updating its proprietary televisions and streaming dongles. As the twenty-first century progressed, Roku continued its expansion and success. In 2021, Roku acquired Quibi's global content distribution rights, announcing plans to develop original programming. In the mid-2020s, Roku had become the industry leader in advertising-based video on demand and developed advertising sales relationships with most Fortune 500 global brands. By 2024, Roku had 85.5 million households streaming 32 billion hours, showing the company retained its solid position in the streaming market.
Impact
Roku played a significant role in making streaming services more accessible to consumers. Though Roku did not develop new streaming services, its products allowed consumers who were not technologically savvy to access new services conveniently and affordably. This increased the popularity of streaming services, helping transition media businesses away from physical media and toward digital media. For this reason, Roku has remained a household name in the streaming industry. Despite challenges, such as security breaches and implementing accessibility features, Roku consistently beat earnings expectations and continued to show significant growth. By the mid-2020s, Roku had also become an industry leader in advertising-based video on demand.
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