Roku has been a dominant force in the streaming market for well over a decade, but recent data suggests that its hardware market share may be slipping. A report from Pixalate, a market analytics firm, indicates that Roku still leads the industry with a 39% market share in the fourth quarter of 2024. However, this represents a significant 16% decline compared to the same period last year. The shift appears to favor competitors like Amazon’s Fire TV and Samsung’s smart TV platform, both of which have gained ground.
We explore what might be going on in my latest video.
Pixalate’s methodology for measuring market share relies on analyzing the placement of advertising across various streaming platforms. Each time an advertisement is served, the firm tracks the device that played the ad, compiling these figures to determine the relative market share of different streaming devices. By assessing this data across an entire quarter, Pixalate provides a snapshot of shifts in user engagement and hardware adoption. This of course only covers hardware that is watching free advertising supported content and won’t account for consumers watching ad-free subscription services.
One possible explanation for Roku’s measured decline is the affordability and availability of alternatives. Amazon, for instance, has the ability to sell Fire TV devices at a loss, making them highly attractive to consumers. At the time the report was compiled, Fire TV Stick 4K was available for as little as $25, offering high-end features like Dolby Vision support at a fraction of the cost of premium devices like Apple TV. With new TVs often coming equipped with built-in smart platforms, fewer people may feel the need to purchase standalone streaming boxes like Roku’s.
Despite the decline in hardware market share, Roku is not necessarily struggling. The company has been shifting focus toward its streaming platform and advertising-based revenue. Roku now reaches 90 million households, including users who access the Roku Channel app on competing devices. This means that even if fewer people are using Roku-branded hardware, the company is still generating revenue through streaming and advertising.
The Roku Channel has emerged as a key asset in this transition. The free, ad-supported streaming service is available on multiple platforms, including Google TV, Fire TV, and Samsung devices. With a growing catalog of original content—including the Emmy-nominated Weird Al documentary and programming from Martha Stewart—Roku is positioning itself as a major player in the ad-supported streaming space. Nielsen data from November 2024 showed that the Roku Channel held a 1.9% share of streaming viewership, placing it on par with Disney+ and ahead of competitors like Pluto TV and Tubi.
Financially, the pivot to streaming and advertising revenue has been paying off. In the third quarter of 2024, Roku generated over $900 million in revenue from its platform business, compared to just $154 million from device sales. The company continues to subsidize hardware to attract users but is increasingly reliant on platform revenue for profitability. By integrating its service into Google and Android TV search functions, Roku is ensuring that its content remains easily accessible across different ecosystems.