Roku IPO a success, despite gaining little revenue from YouTube or Netflix

Roku stock price rises 68 percent on its first day of trading

Roku Premiere+
Roku has gone public. The streaming device company officially began trading on the Nasdaq under ROKU on September 27, after filing for an initial public offering on Friday, September 1. Though reports initially suggested that the company might have trouble going public, since Roku does not actually make much money from either Netflix or YouTube, that hasn’t proven to be a problem. Shares were priced at $14 upon opening and on Thursday, the firm’s share price had jumped 68 percent to trade at $23.50 per share.

In the IPO filing, the company said that as of June 30, it has 15.1 million active accounts, and users have streamed more than 6.7 billion hours worth of content on the platform from January to the end of June. This marks a 62-percent growth from the same period in 2016. Last year the company generated $398.6 million in revenue, a 25-percent increase from 2015.

All of this may sound appealing to investors. In the first six months of 2017, Roku lowered its prices and even saw a 37-percent increase in device sales. But then comes the hurdle that is Netflix and YouTube. Netflix is the most popular video service on the device, but makes the company little to no money at all.

“We do not expect revenue from Netflix to be material to our operating results for the foreseeable future,” Roku said, according to the Marshfield News-Herald.

And it’s the same story for YouTube. The video sharing service is Roku’s most popular ad-supported service, yet it brings in zero revenue for Roku. The company doesn’t get a cut of YouTube’s ads. And the device has some pretty serious competition, despite how well the company may be doing at present.

“Competition is intense for these resources, and a competitor with more extensive product lines and stronger brand identity, such as Apple or Google, possesses greater bargaining power with retailers,” Roku said in the filing. The company is apparently fighting for shelf space at retailers.

Amazon, for example, is able to sell its own TV streaming products as well as market and promote those products more prominently on its official website. But user trends favor the company’s services. About 80 percent of millennials say they watch or have access to streaming services, so that’s good news for the company.

“Over the past two-and-a-half years, Roku has expanded their product lines, evolved their platform business with smart-TV makers, and continued to build out its advertising business,” Brett Sappington, director of research at consulting firm Parks Associates, told the LA Times. “A platform-based approach and their advertising business will be keys to their future revenues and success.”

Update: Roku has gone public, and had a very successful first day on the market. 

Features

Where Toronto sees smart sidewalks, residents see ‘1984.’ So what now?

Google-parent Alphabet is partnering with Toronto to develop a new, smart neighborhood, but some are concerned about privacy and the company’s motives. Could residents derail the project?
Business

Chinese court upholds Qualcomm's complaint that Apple infringed on two patents

Apple is following the FTC's lead and has sued Qualcomm for a massive $1 billion in the U.S., $145 million in China, and also in the U.K., claiming the company charged onerous royalties for its patented tech.
Deals

Sign up for Verizon Fios Triple Play and get a free Amazon Echo, Prime for a year

Verizon is now offering its Fios Gigabit Connection Custom TV and Phone service with Amazon Prime tossed in. While valid, you can sign up for the company’s Triple Play package, which includes all three Fios services, for $80 per month.
Home Theater

Step aside set-top boxes, the best streaming sticks are tiny and just as powerful

Which streaming stick reigns supreme? We pit the Chromecast and Chromecast Ultra against the Roku Premiere, Roku Streaming Stick+, and the Amazon Fire TV Stick 4K to help you decide which one will be the best fit in your living room.
Home Theater

Comcast subscribers can finally stream Amazon Prime Video on Xfinity X1

Comcast subscribers who own one of the company's X1 set-top boxes can now use them to stream Amazon Prime Video, bringing some of the best shows and movies available to stream to their TVs like never before.
Home Theater

AT&T’s new three-tiered streaming service will include movies, possibly HBO

AT&T has laid out new details for its planned streaming service that's set to launch in 2019. It will include three different price tiers, and will feature movies, original programming, and content from its acquisition of Time Warner.
Social Media

Ride the rails and share your stories with Amtrak’s new social media residency

Amtrak is looking for travel fans with a knack for telling stories on social media. The new Amtrak social media residency program wants amateur travelers to share photos, video, and written content from aboard long-distance trips.
Computing

A second Wells Fargo glitch results in the foreclosure of more homes

A computer error has struck Wells Fargo once again, resulting in hundreds more homes being mistakenly foreclosed after a first glitch was reported in August. To compensate one customer, the bank sent a check for $25,000.
Mobile

Samsung partners with AT&T to create a multi-band 5G smartphone for late 2019

Ready to experience a radical transformation in mobile communication? AT&T is launching mobile 5G in cities across the country over the next few months. Here's everything you need to know about the AT&T 5G rollout.
Mobile

Qualcomm's 3D Sonic fingerprint sensor could make your next phone more secure

Almost exactly a year after the launch of the Snapdragon 845, Qualcomm took the wraps off of its next-generation mobile platform, the new Snapdragon 855. The new chip puts an emphasis on A.I. performance.
Movies & TV

Movies Anywhere service adds Comcast films to its library and devices

Movies Anywhere lets you watch movies purchased from different services all in one place, and it just got even better with the addition of Comcast, which joins Microsoft, Amazon, iTunes, Google Play, Vudu, and FandangoNow.
Web

Can Microsoft’s Airband Initiative close broadband gap for 25M Americans?

A new report from the Federal Communications Commission (FCC) says that 25 million Americans do not have access to broadband internet. Of these, more than 19 million are living in rural communities. Can Microsoft help out?
Business

Amazon scouted airport locations for its cashier-free Amazon Go stores

Representatives of Amazon Go checkout-free retail stores connected with officials at Los Angeles and San Jose airports in June to discuss the possibility of cashier-free grab-and-go locations in busy terminals.
Business

‘Ralph Breaks the Internet’ wins one of the worst box-office weekends of 2018

Wreck-It Ralph sequel Ralph Breaks the Internet stayed on top of the weekend box office for the third week, winning what was one of the worst weekends for ticket sales in the US so far this year.