Roku thinks it’s well-positioned to take on LG, Samsung, Vizio in smart TV market

As Roku prepares to penetrate the OEM space with its own branded smart TVs, the company is optimistic its first party TVs will bolster the overall smart TV market as well as boost user engagement on the platform.

Speaking at the Morgan Stanley Technology, Media and Telecom Conference, Roku Founder and CEO Anthony Wood talked up Roku’s presence in the licensed TVOS space, noting the company has a “very large lead” over Amazon and Google in the U.S.

“Both of those companies are growing market share, but they’re still tiny,” said Wood. “The biggest opportunity for us to continue to grow is by taking share from LG, Samsung and Vizio…those are the TV companies that are sort of left in terms of material market share other than Roku.”

Though Roku is ahead of Google in terms of domestic TVOS market share, Wood pointed out Google was the first to license Android to third-party TV manufacturers. Whereas Roku launched its Roku TV program in 2014.

Google also has an edge on Roku in international markets because of the prevalence of the Android mobile OS. Still, that’s not stopping Roku from obtaining share in those markets.

“We quickly start to grow market share and we start to take market share from Google if they have [it] in that country,” Wood said.

Growth within the TV OEM market continues to rise. Wood remarked that while the incumbents have built their own proprietary operating systems, it takes a “huge” amount of money and resources to be a “successful global TV operating system.”

“I don’t think actually any one TV company can amortize the cost successfully on just their brand,” he said.

Roku in January reported its platform now boasts 70 million global active accounts. Wood believes Roku-branded TVs will not only drive growth in active accounts but also help Roku’s OEM partners.

“TV companies are very traditional, so they often don’t want to adopt innovations until they know they’re going to be successful in the market,” Wood said. “By doing our own first-party TVs and proving that some of these innovations we believe in are actually liked by customers, that will encourage our TV partners to adopt them and help them have more advanced and innovative products in the market.”

Some OEM competitors aren't overly concerned about Roku entering the market. Vizio CRO Mike O'Donnell said in January Vizio smart TVs have an established retail presence due to the company's long-standing relationships with Walmart and Target.

Engagement-wise, Roku intends to keep focusing on improving content discovery.

“Roku’s role as a platform is different from that of a streaming service,” Wood said. “One of our biggest jobs is to help consumers find content across the entire platform.”

For instance, Roku in November launched its Sports Zone, an aggregator that helps users find where to watch leagues and sports games without sifting through multiple apps.

“Those 70 million active accounts, when they turn on the TV and they see the Roku home screen, that’s our biggest competitive advantage…to help viewers find content and help services promote their content.”