Roku Inc (NASDAQ: ROKU) made it clear that it wants to expand its footprint in content and distribution as it acquired Quibi’s content at the start of 2021. Commenting on its potential to compete with the giants like Netflix and Disney in this space, founder of Luminari Capital, Daniel Leff, said on CNBC’s “TechCheck”:

“Roku has executed very well over its history and gone into the direction of acquiring very specific and strategic content for the platform, including Quibi for $100 million (£72.44 million) or less. I think as long as Roku is careful about building that content portfolio and not alienating its great content partners, it can succeed. They’ve recently raised a significant amount of capital, and that is rumoured to be primarily for content.”

Daniel says Roku needs to follow Spotify in its footsteps


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According to Daniel, Roku needs to follow Spotify in its footsteps. The audio streaming and media services provider has great relationships with the music labels – its primary content partners – but has recently started producing and acquiring content as well.

“Roku can’t be competing directly against Netflix, and Amazon Prime Video etc. and their to-date content acquisitions show that. So, they’ve acquired the Quibi catalogue that’s content that is not viewable anywhere else. It’s exclusive, it’s a very different type of content, targeting a very different demo than something like Netflix or HBO. As long as they continue along those lines, they’ll maintain phenomenal relationships with their content partners,” he added.

Daniel is an early Roku investor who also sat on the board.

Roku reported its quarterly financial results in May

In its latest fiscal quarter, Roku topped Wall Street estimates. It added 2.4 million active accounts in the first quarter that brought its total to 53.6 million. For Q2, the Los Gatos-based company now forecasts up to $620 million of revenue.

“Advertisers continued to follow audiences and move budgets into TV streaming, with Roku’s monetised video ad impressions more than doubling year-over-year,” Roku said last month in a letter to shareholders.

Roku closed the regular session about 5% up on Friday. Including the price action, the stock is now exchanging hands at $368 per share versus a year-to-date high of $469 per share in mid-February. Roku had started the year 2021 at a much lower $318 per share. At the time of writing, it has a market cap of more than $48 billion and a price to earnings ratio of 452.13.

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