Roku City wants to colonize Times Square.
The purple-hued metropolis, the backdrop of the popular screen-saver Roku introduced in 2017, is invading New York City’s so-called “Crossroads of the World” in a bid to make the streaming platform more top of mind in the Big Apple just as the advertising world gets ready to hear pitches from a variety of new-tech video players.
Roku wants to remind both consumers and advertisers about its relevance in the weeks leading up to the NewFronts, a set of annual presentations by digital-media outlets to advertisers. In 2023, streaming has gained new scale and Madison Avenue is looking for ways to weave commercials into the consumers’ broadband experience. Digital advertising is projected to grow 9% in 2023, according to Interpublic Group’s Magna, compared with a decline of 4% for linear advertising formats.
Roku intends to promote its presence as a sort of gateway to streaming activity, and how it can weave commerical messages and interactive opportunities into the screens its subscribers see as they make their programming selections.
“Other players are in the streaming wars,” says Charlie Collier, president of Roku Media, in an interview. “What’s distinctive about Roku is that we are not in the streaming wars, but they are playing out on our platforms.”
The move is one of the company’s first promotional efforts since Collier joined in October after stints in senior roles at Fox Broadcasting and AMC Networks. One of his mandates is to convince advertisers to think of Roku as a top vehicle, even though it does not make as much signature programming as many of its rivals. Indeed, Roku is seen as more of a gateway to other companies’ content than it is as a purveyor of originals. But in a world where streaming is on the rise, helping to spur more of that activity is seen as valuable in and of itself.
The billboards are slated to run between April 17 and May 21 — dates that coincide not only with the NewFronts, but also the kickoff of the media industry’s’ annual “upfront” market, when media companies try to sell the bulk of their advertising inventory for the next programming cycle. One sign might read “3.5 million homes in NYC. 70 million homes stream in Roku City (and the rent is free).” Another might tell passers-by that “Dreamers come to NYC. Streamers come to Roku City.”
Advertising is a key revenue stream for the company, which has been making a bid to enter the smart-home market. “Roku’s profits now appear to be essentially a play on advertising in the crowded CTV and AVOD marketplace,” said Michael Nathanson, a media-industry analyst, in a research note released Monday morning.
Though Roku may not be duking it out directly with Disney or Netflix, it faces some of its own challenges. More of the entertainment companies it calls its partners are opening ad-supported video tiers, hoping to lure consumers into direct relationships with their own venues. These same companies are also pulling back on content spend, as they face new pressures from Wall Street to turn a profit – meaning Roku may have less content to which it can serve as a gateway.
“The current reality is that Roku’s biggest customers are now grappling with the economics of these pressures and are starting to pause the rapid escalation in streaming spending,” said media analyst Nathanson in a prior research note. “Leadership at companies large (Disney, Warner Bros. Discovery, Paramount) and small (AMC Networks, Lionsgate) are in the process of reducing content spending and marketing costs while raising prices in an attempt to improve their returns on their streaming investments.”
Roku City, once seen as a simple backdrop to put on screen when users weren’t actively utilizing the Roku service, has become a piece of intellectual property ,with subscribers trying to explore different scenes that feature nods to Hollywood properties. The backdrop reminds Roku users of the glitzy offerings they can access by using the service. “Millions of people interact with Roku City every day, to the point where more people see Roku City than see every NFL game on TV,” says Collier. As the media industry’s critical selling time draws near, Roku executives are betting the Times Square placement means the faux metropolis is seen not only by a lot of people , but the ones who influence how ad money is spent.
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