'We outperform all of them': Roku is readying itself for competition from the likes of Amazon and Comcast as the streaming war heats up

HBO

• The next battle for dominance in streaming may be related to the aggregation of OTT apps.
• Roku is is commonly seen as the leading aggregator of OTT content.
• But other content distributors, like Comcast, have shown interest in offering similar services.
• A Roku executive told Business Insider he expects the competition to only increase.

Alongside the battle for developing the top streaming service is a concurrent battle for aggregating those services together.

As more and more over-the-top options for users crop up - from video-on-demand services like Netflix to digital TV services like DirecTV Now - consumers are looking for an easy, well-organized way to access their subscriptions. Scott Rosenberg, an executive at Roku, expects the competition in that part of the market to only increase.

"I would say broadly consumers have so many more options now to watch longform premium video in our living room and so we all should expect that the traditional video distributors will feel compelled to compete more aggressively to keep consumer attention and to compete at the price point that consumers are demanding," Rosenberg, GM of the company's platform business, told Business Insider.

Roku is commonly seen as the leading aggregator of OTT content, offering more than 5,000 channels for users who buy its set-top boxes. But new entrants to the aggregation business continue to emerge. Comcast, which doesn't have its own OTT service for US customers, is reportedly working on a set-top box for broadband customers that will aggregate OTT apps.

That offering would likely directly compete with Roku. While Rosenberg wouldn't comment specifically on Comcast's strategic decisions, he said he isn't surprised that traditional media distributors, like Comcast and AT&T, are starting to innovate with offerings similar to Roku to keep up with consumer demand.

"Consumers are asking for skinnier bundles and more varied bundles, they're asking for a better ad experience, they're asking for more apps, more content diversity, and OTT makes that possible. And so I would fully expect that all of the traditional video distributors feel compelled to try and gravitate towards that user experience," he said.

The growing competition in this space is monitored by an industry curious to see what platform will win dominance. "There's no shortage of people who have identified [aggregating OTT apps] as the next big thing," Alan Wolk, cofounder and lead analyst for TVREV, told Business Insider. "Amazon and Apple want to do it. [Comcast] wants to do it."

Roku's user base is its big strength, with 24 million active user accounts as of the end of the third quarter. Morgan Stanley analysts predict Roku will continue to pick up users over the next four years, but how much growth it can achieve is up for debate.

"Our bull case of over 50 million active accounts by [year end] 2022 would represent a doubling over the next four years, reaching >50% penetration of US broadband homes," the analysts wrote. "Reaching these heights despite platforms like Amazon, Apple, and Alphabet's rising focus in TV hardware, software, and content, while incumbents like Comcast grow the OTT content distributed to its [approximately] 14 million X1 customers, will be challenging."

Rosenberg Roku isn't overly concerned about the growing competition in this space."We've competed our whole lives here at Roku with big companies, inevitably companies much bigger than us," he said. "We compete with Apple, Amazon, Google, we outperform all of them, in unit sales and engagement with consumers in the TV market."

And it's Roku's unique relationship in the industry that he thinks gives the company a boost.

We're "a relatively neutral entity in the ecosystem," he said. "We're not typically vertically integrated into music or movie services, and as a result we have all the major music services, all the major movie services available in OTT because we're a platform."