Roku’s average revenue per user is $40+ a year per their financials, so there’s definitely a lot more subsidization of the hardware than most consumers think.
That's fairly interesting, and honestly lower than I would have thought. I really have no idea how long the average consumer holds onto a TV, but if we guess 3-5 years then we're at $120 - $200 subsidy per customer. And this is before you think about the maintenance of their advertising / tracking servers. (although maybe that is factored in?)
Yes, most consumers would buy a $250 TV rather than a seemingly-equivalent $450 TV, but another $200 just to not be tracked and advertised to is really a small lift. Kind of surprising that there aren't options for this in market if the numbers are really that tight. Compare a cheap Windows laptop to a macbook -- yes, they're not really equivalent from a technical standpoint but to a lot of consumers they may effectively be equivalent as the "device my kid needs for school." But the price differences there will be much greater. Perhaps as much as $500 or more.
>I really have no idea how long the average consumer holds onto a TV, but if we guess 3-5 years
3-5 years is smartphone life. New TVs should easily last 10 years. My $600 1080p TV from 2016 is still in the living room. A subsequent $600 4K TV bought in 2020 is also fine. I don’t see what could prompt me to replace them until they break. The quality difference is negligible, especially with the garbage bitrate most streaming services provide.
Agreed, and my TV is much older as well. I was just guessing about average consumers, but maybe you're correct. Maybe people don't cycle out TVs so quickly. I suppose the length of ownership has a strong bearing on cost. Part of the concern here as well is that Roku would be incentivized to err on the side of caution. ie, if not enough people keep their TVs for 10 years, they might need to practically plan for customers to keep their TVs for only 5 years.
Yeah - we barely watch TV in our house (relative to my experience growing up, at least), and we have two: a 50" in our bedroom and a 60" in the living room. They're 12 and 8 years old, respectively.
I'm just now starting to feel like I should consider a new one for the living room, but it's far from the top of my list.
To do that, they'd have to admit what they're doing out loud, and then they'd have public sentiment against them. It'd ruin what they have.
Instead, they'll wait for the revolt, and then sell the upgrade. Then they look like heroes for doing what people are asking for, instead of villains that cause the situation in the first place. They'll spin it as offering affordable TVs to those can't afford them without the advertisements, and no-ad TVs for those who are willing to pay the extra.
