Roku, Starz execs break down the new world of distribution

With the profusion of many new digital distribution platforms, and even more digital networks, both sides are having to build new kinds of relationships, tapping new kinds of tools, while also providing more flexibility in relationships than were seen on legacy platforms.

That was the consensus of a panel on the “New World of Distribution and Partnerships” during Tuesday’s edition of The Stream TV Show.

The lone representative from a platform, Roku, saw its user base jump 35% during the pandemic to 54 million users as of its last earnings call, said Regina Breslin, Roku’s head of content distribution, domestic. That makes the company’s customer footprint the largest in the United States, and a must-have outlet for streaming services. And Roku has a few tools to employ for its partners.

“It’s a tremendous opportunity for our partners to really work with us in a growth environment,” Breslin said. “I think historically, the negotiations in the traditional side of media have been almost a zero-sum game, right? If I win, you lose. And I think now, when we talk about this exchange of value, when we’re looking at where we are in a platform, there’s a growth opportunity. So, when Roku is growing and being successful our partners are also growing and being successful. We’re looking for partners to do that by leaning into the tools and capabilities that we have on the platform, to help them grow and connect them those viewers.”

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Breslin acknowledged “some challenging deals,” no doubt referring to, among other things, the months-long stalemates that kept Peacock and HBO Max off Roku after their launches about a year ago as the two sides jockeyed over a variety of issues.

“I think there’s been some education about the platform,” Breslin said. “Look, when you’re shifting from a traditional mindset to the streaming mindset, there’s been a shift where it’s taken a little bit to get some folks to understand what streaming is like.”

The key, Breslin said, is Roku’s “one-to-one relationship…with our viewers. That’s where we can really utilize the advanced capabilities and the data that we have access to that our viewers are opting into, to be able to really target them, whether it’s recommendations for content, to help with subscriber acquisition, and customer retention, brand marketing. There’s just a lot of different tools that we’re able to pull the levers that maybe traditional partners are not able to.”

Premiere Digital Head of Growth Michele Edelman said one of Roku’s particular benefits is a strong search function that encourages discovery.

“You can type in anything and either a channel will come up or a show will come up or something,” Edelman said. “It’s a really nice potpourri or portfolio of options.”

Partnerships can be a little sticky at the front end, however, depending on how structured and rigid a given platform is about what it allows networks to be, panelists said.

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“I think some of the friction has come in where certain services try to very strictly define how their consumers will interact with them, how they will subscribe with them,” said Starz SVP of Distribution Stefanie Meyers. “Starz is not trying to tell our consumers how to behave. We're not trying to tell our partners how to behave. We're trying to grow the pie together with our partners to bring our content to as many consumers as we can. So wonderful partners like Roku and Amazon and other digital players, they offer both the connected device to reach the consumer, but also the levers that Regina was talking about from the sense of marketing, real-time data. We’re able to very quickly pivot on the reaction to the consumer around certain shows.”

As an example, Meyers pointed to “P-Valley,” which took off last summer for Starz. Using real-time data, Starz was able to react within days with a much-enhanced marketing campaign to push the show more broadly.

“We were able to pivot and amplify marketing on digital platforms very quickly, which is very different than the traditional space, where data is not as easily shared, and you can't pivot as quickly to amplify your message and your content,” Meyers said. “We're able to leverage that data and that information, sometimes within days, even within a week, if we're releasing it week over week, to amplify the message in certain outlets on those platforms.”

A service such as Roku has a lot of available marketing tools, including a splash-page screensaver that periodically scrolls promotions, Meyers said. 

“Roku has those amazing ads right on the home screen,” Meyers said. “So, we can leverage those around, not just the availability of the ad, but the timing and the placement to give more amplification to a certain series. It’s the same thing across other digital platforms where we can pull certain levers like running a banner button on (Amazon) Fire (TV) devices, and things like that, but just put the content front and center in front of the customer as we see how it's tracking week over week.”

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The growth mindset of the current SVOD space is somewhat similar, panelists agreed, to what the cable business saw in the late 1980s and 1990s, when expanding audiences, improved technology, and growing revenues combined for a boom era.

“There are similarities in that,” said Gabriel Sauerhoff, Discovery’s SVP, Digital Distribution. “Doing deals with these platforms is critically important because they represent where consumers are spending an increasing share of their time and their money. And so we have to be on these platforms to have the optimal chance to be successful.”

But there are some critical differences between that cable boom time and now, Sauerhoff said.

“In simpler days, when you would do a deal to get Discovery Channel carried on a cable lineup, you'd be one of 25 to 500 channels on the lineup,” Sauerhoff said. “You get your feed in there and you'd sell ads and a lot of people would watch your content, hopefully, and you're sort of done. But here in this model, getting your app live on a platform like Roku or others, it is really just very much the beginning. At that point, you’re one of thousands, if not tens of thousands, of apps, depending on the platform you're talking about. How do you stand out?”

That’s where having high-quality content, leveraging the platform’s marketing tools, and relying on a strong relationship with the platform can pay off, panelists said. Marketing tools need to be ticked to spotlight the highest-profile content, to draw viewers in. Then, it’s on the service to keep people around.

“How do you get people to come into your service?” Sauerhoff said. “How do you nourish them? How do you encourage them to subscribe? And that's fundamentally different than just being on a lineup of channels, and some portion of those people will probably find you and find something on your channel that they want to watch. And so, we believe that partnership with our direct consumer distribution partners is of critical importance across the value chain, be it acquiring subscribers, retaining subscribers, effectively monetizing ad inventory.”