Market Insight

Roku Channel launches in UK amid favourable conditions for AVoD services

April 09, 2020  | Subscribers Only

Aled Evans Aled Evans Senior Research Analyst, Channels & Programming

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The Roku Channel launched in the UK on 7 April, offering an extensive library of ad-supported TV and movie content. The UK is the first launch outside North America and heralds the beginning of the channel’s international expansion. The company has operated the Roku Channel in the US since 2017 and Canada from 2018.

The UK Roku Channel launches with over 10,000 on demand TV episodes and movies provided by partners that include All3Media International, EndemolShine Group and DRG. Hollywood studios including Lionsgate and Sony Pictures Television also number among the 40 content partners involved in the UK launch.

The Roku Channel is available in the UK on Roku’s streaming player plus Now TV devices, Sky Q box and Roku TV (a Roku-branded TV manufactured by Hisense). The UK version of the channel includes a Kids & Family section—a feature also offered in the US. However, at launch the UK version does not include other features offered in the US: web access, live channels or premium TV channels subscription.

The Roku Channel joins the UK market alongside the ViacomCBS streaming service Pluto TV which launched in the UK in 2018. Another leading US AVoD service, Tubi, is also set to launch in the UK during 2020—although a launch date is not confirmed. Tubi was acquired by Fox Corporation for $440 million in March in a deal that highlights the current strong interest in AVoD services.

Our analysis

The UK has advantages as the launch pad for the international roll-out of US-based AVoDs. The common language and cultural crossover with the US means many consumers should be familiar with, and open to, much of the content on the Roku Channel. Additionally, by partnering with companies with a strong presence in the UK TV market such as All3Media and EndemolShine the Roku Channel will also be able to offer additional content that is UK originated and tailored to local consumer tastes.  

A drawback is that elements of the US channel, such as live channels and web access, are not available in the UK at launch. The channel is also currently restricted to the owners of Roku, Now TV and Sky Q devices. However, it is likely that these elements will be added over time and wider access will also be introduced as the channel becomes established in the UK market.

After accounting for the impact of COVID-19, Omdia forecasts that the UK online video advertising market is set to grow to $2,933 million by 2023. There is currently an additional opportunity for AVoD services during the current crisis. It is likely that price-conscious consumers will be more inclined to try ad-supported OTT services in the additional hours of free time at home during the pandemic lockdown. Beyond the lockdown there is also the likelihood of many consumers having reduced discretionary spend and so free ad-supported services will be more attractive rather than subscription or pay TV packages. The Roku Channel is therefore launching in the UK at an opportune moment.

Roku has indicated that the UK Channel will have a similar ad load to other platforms. The US Roku Channel has an estimated ad load of eight minutes per hour. For comparison, NBCUniversal’s Peacock is aiming for a lower ad load of five minutes an hour and Hulu has an ad load of seven to eight minutes.

In addition to the ad load per hour, other elements of the consumer ad experience will be important to help build up a user base and retain users in the long term. Roku has stated that ad placement will use the television programme’s original TV ad break structure. Additionally, viewers will not be required to watch an advertisement before starting the viewing an episode. There will also be frequency capping: the aim is to not show the same ad in a half-hour period. Each of these elements are a good starting point for maintaining a positive ad experience for consumers. However, Roku will need to continue to innovate as other AVoD services, such as new entrant Peacock, have promised a set of fresh ad tech innovations to further improve the ad experience and give them a competitive edge.

With a combination of a slick ad experience and a substantial content offering, the Roku Channel has the potential to be a strong addition to the UK market. With consumers also stuck at home during the current pandemic the Roku Channel is likely to find the UK a fertile market for its nascent international rollout.


Research by Market
Media & Advertising
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