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Roku’s revenues could face pressure as streaming wars slow: Analyst

Roku’s platform revenue has grown rapidly over the past few years but one analyst expects half of that equation to come under pressure as the streaming wars slow down.

In a new research note, MoffettNathanson analyst Michael Nathanson estimates that during the second quarter, approximately half of Roku’s platform revenue came from advertising and the other half came from “other platform revenue.” That includes revenue sharing agreements with streaming services available on the Roku platform and “performance obligations” that Roku describes as unspecified software upgrades embedded in the hardware that are initially recorded as deferred revenue.

Starting with the Disney+ launch in November 2019, Roku has reached a steady stream of distribution agreements with new services including Peacock, AMC+, HBO Max, Discovery+ and Paramount+.

A Facebook-backed consortium of tech companies has announced an extension to a subsea cable system it’s developing that is set to be the longest of its kind, at a length of 45,000 kilometers. The 2Africa cable, first announced by Facebook in 2020 as linking Europe and Africa, will now also extend out from Africa to serve the Middle East and India when it goes live in 2023, the consortium said Tuesday.

The expansion of the 2Africa project comes hot on the heels of Facebook and Google’s announcement last month that they would work together on a subsea cable project in the Asia-Pacific region to begin service in 2024. Facebook’s involvement in laying subsea cables is part of its global infrastructure commitments, designed to deliver faster and more reliable internet to different regions of the world — especially those that are currently disconnected. Fierce Video

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