Special Offer: Subscribe now for a free ticket ($499 value) to The Future of Startups.

A Roku streaming device and remote control. Photo by AP
True Value
Media/Telecom

Despite High Stock Price, Roku Is No Netflix

Photo: A Roku streaming device and remote control. Photo by AP

Of all the tech companies that went public last year, Roku may have been the biggest surprise hit. Having made itself almost as synonymous with fast-growing streaming video as Netflix, Roku’s stock soared as high as $50 from an IPO price of $14. Even after a recent sell-off, sparked by slowing sales in the fourth quarter, Roku’s early investors are still sitting on enormous gains.

But anyone who thinks the stock could soar over the long term like Netflix is likely to be disappointed. Roku isn’t fundamentally transforming television. It is just one of a number of companies, including Apple and Google, making streaming devices. That’s a tough business to be in, with low profit margins. And because Roku is cutting prices on its devices, its revenue from streaming players fell 7% in the fourth quarter from a year earlier.

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
 
Exclusive Media/Telecom Entertainment
Apple Plans Podcasting Subscription Service in Threat to Spotify
Apple Plans Podcasting Subscription Service in Threat to Spotify
Apple—long considered the sleeping giant in the podcast space—is waking up. The company, which runs the most widely used podcasting app in the industry, is discussing launching a new subscription service that would charge people to listen to podcasts, according to people familiar with the matter. Such a service could pose a threat to Spotify, SiriusXM, Amazon and other big companies...
Latest Briefs
 
Walmart’s Marc Lore Is Stepping Down
ByteDance Rival Kuaishou Gets Approval to Raise as Much as $6 Billion in Hong Kong IPO
Chinese Smartphone Xiaomi Unexpectedly Added to U.S. Blacklist
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
How Blocking Trump Puts the Future of the Internet at Risk
Modest Proposals Policy Facebook
How Blocking Trump Puts the Future of the Internet at Risk
The move by social networks to deplatform President Trump last week was the right call. In reality, he left Facebook and Twitter no other choice.
Let’s Not Celebrate the Platforms for Kicking Trump Off
Opinion Facebook
Let’s Not Celebrate the Platforms for Kicking Trump Off
Calling for violence on social media is OK and spreading disinformation is fine, especially if you’re the president of the United States.
The Information’s Return to the Office Tracker
Startups COVID-19
The Information’s Return to the Office Tracker
Of the companies most opposed to continuing remote work after the pandemic fades, Netflix stands out for the intensity of its stance.
Can Mayor Francis Suarez Bring Silicon Valley to Miami?
Can Mayor Francis Suarez Bring Silicon Valley to Miami?
Rumors about who might be moving to Miami to escape the supposed decline of the San Francisco Bay Area are spreading faster than the VC funding buzz around hot tech startups.
Sequoia Buys Shares in Elusive Startup Zapier at Multibillion-Dollar Valuation
Exclusive
Sequoia Buys Shares in Elusive Startup Zapier at Multibillion-Dollar Valuation
Zapier isn’t a household name outside Silicon Valley, but the world’s top venture capitalists have long been trying to own a piece of the booming enterprise software firm.
Following Trump Ban, Facebook Tells Employees to Avoid Wearing Company-Branded Apparel
Exclusive Facebook
Following Trump Ban, Facebook Tells Employees to Avoid Wearing Company-Branded Apparel
Facebook on Monday told employees to avoid wearing or carrying company-branded clothing and other items in public following the company’s suspension last week of President Donald Trump’s account and its more recent crackdown on content mentioning “Stop the Steal,” an online movement that falsely claimed the presidential election results had been corrupted.