Roku users surge past 30 million

The streaming platform, Roku, earnings surpassed all expectations during the second-quarter.

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Roku's revenue increased from $157 million to $250 million in the span of just a year. According to Roku, their profits increased due to subscription services and advertising dollars.

TickerSecurityLastChangeChange %
ROKUROKU INC129.94-9.13-6.57%

According to Roku, they added 1.4 million active accounts during the second quarter, which brings their total active accounts to 30.5 million. The company said users streamed 9.4 billion hours during the same time period, which is nearly a 75 percent increase.

According to a new forecast by eMarketer, the number of American cord-cutters has jumped by 19.2 percent just this year. Forecaster eMarketer expects that number will rise to 25 percent by 2022.

The report also projects the number of U.S. households with pay-TV subscriptions will decline by 4.2 percent to 86.5 million this year. The continued rise in cord-cutters comes amid the growth of cheaper alternatives like NetflixHulu, CBS All Access and upcoming services like Disney Plus, HBO Max, NBCU and BBC and Discovery's nature-filled streaming service.

With consumers turning to streaming services, eMarketer says that satellite, cable or telecom providers will take some big hits.

By 2023, eMarketer anticipates the total number of pay-TV subscribers to decrease from 100.5 million in 2014 to 72.7 million. That means the number of households without a cable, satellite or telco pay subscription will rise to 56.1 million, up from 22 million in 2014.

Not only is TV viewership declining, so is the amount of TV actually being watched by all age groups. This year, TV viewing time is expected to drop an average of 3 percent to 3 hours and 40 minutes, according to eMarketer.

“As viewing time and the number of TV households drop, networks will have to sell ads at higher prices to account for lost viewership,” said Eric Haggstrom, an eMarketer forecasting analyst.

“This will become increasingly difficult to do over time. As a result, traditional TV networks such as Disney and NBCU are bulking up their direct-to-consumer [D2C] digital offerings in order to regain lost viewers.”

Although TV providers may suffer from decreasing subscriptions, eMarketer notes that many also often provide broadband internet as part of bundle deals. Without bundle deals, consumers will ultimately end up paying more for the internet, which improves profit margins.

"Total revenue growth accelerated to 59 percent [year over year], primarily driven by growth in advertising as Roku monetized video ad impressions once again more than doubled [year-over-year]," a Roku shareholder letter read."

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With this surprising growth, the company is now expecting its revenue in 2019 to be between $1.075 billion and $1.095 billion.

FOX Business' Michael Van Schoik contributed to this report.