The radio comedian Fred Allen once expressed his disdain for television by declaring, "They call it a medium because nothing is well done."
But that was a long time ago. TV has moved on from the old cathode ray tube machines of yesteryear that broadcast "Captain Video and His Video Rangers" to sophisticated, connected devices that offer all kinds of entertainment created all over the world.
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Watching TV is America's favorite pastime, according to the U.S. Bureau of Labor Statistics, and the people at Roku (ROKU) have a nice piece of that action.
Founded in 2002 by Anthony Wood, Roku gets its name from the Japanese word for "six," as it was the sixth business the billionaire established.
The San Jose, Calif.-based company announced in February that it had more "than 80 million active accounts and counting" as consumers continue to stream over to TV streaming.
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Roku sees 'challenging environment'
Roku said that viewer engagement was also at a record high, where, for the first time, more than 100 billion hours were streamed on the platform in 2023, averaging a record of 4.1 hours per day per account in the fourth quarter.
However, there have been challenges as the streaming sector has become more competitive.
The stock price has dropped from $473 per share in the years after the Covid pandemic, when in-home entertainment demand soared, to $57 at last check.
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In addition, the company announced a security breach on April 12, saying that 576,000 customer accounts were affected.
This followed an earlier breach, announced on March 12, that affected 15,363 customers and involved stolen credit card, password, and username information.
Roku is scheduled to report first-quarter earnings on April 25. Analysts surveyed by FactSet expect the company to post a loss of 61 cents per share on $844 million in revenue.
A year ago, the company posted a loss of $1.38 per share on revenue of $741 million.
Roku reported a bigger-than-expected fourth-quarter loss in February, amid intense competition and lower customer spending.
In a Feb. 15 letter to shareholders from Wood and Chief Financial Officer Dan Jedda, the company said it planned to increase revenue, free cash flow, and profitability over time.
"At the same time, we remain mindful of near-term challenges in the macro environment and an uneven ad market recovery," Roku said.
"While we will face difficult year-over-year growth rate comparisons in streaming services distribution and a challenging (media and entertainment) environment for the rest of the year," the letter said, "we expect to maintain our Q4 2023 YoY Platform growth rates in Q1."