Roku unveils $2.99 ad-free subscription streaming service

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On Tuesday, Roku introduced an affordable ad-free streaming service at just $2.99 per month, making it the most budget-friendly option among major corporations within the United States.

The novel streaming platform named Howdy boasts a vast collection of around 10,000 hours of entertainment spread across numerous titles, provided by studios like Lionsgate and Warner Bros. Discovery. Among the offerings are the action movie “Mad Max: Fury Road,” sports drama film “The Blind Side,” and the series “Weeds.

In simpler terms, Anthony Wood, the founder and CEO of Roku, stated that Howdy, which costs less than buying a cup of coffee, is free from advertisements and created to work alongside, rather than against, top-tier services.

The increase in pricing by several streaming platforms occurs under circumstances where they’re under pressure from investors to improve profitability, given rising costs of production.

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Due to a surge in popularity for the Roku Channel, which is ad-supported, Roku Inc., based in San Jose, significantly expanded their workforce in Santa Monica by over 100% last year.

However, San Jose-based Roku, recognized for its software and smart TV devices that function as a gateway for viewers to access multiple streaming services on their televisions, perceives a chance to leverage the rising interest in affordable streaming solutions and boost income from its platform.

Roku’s own, ad-supported streaming service, The Roku Channel, has seen significant success. Unlike other streaming services, Roku operates with a broader range of business strategies.

The organization generates income by marketing and selling devices, displaying advertisements, and receiving a portion of the revenue from subscriptions or programs sold via their platform. Additionally, they manufacture television sets branded with their name and create smart home gadgets.

This year, the company has additionally aimed to grow its collection of content by purchasing Frndly TV, a Denver-based subscription streaming service, for $185 million.

In a recent email, Brahm Eiley, president of The Convergence Research Group based in Victoria, B.C., stated that “Howdy” stands out as the most affordably priced ad-free service among major U.S. companies. Given Roku’s success in providing free content with ads in the U.S., it’s not unexpected that they are experimenting with unique strategies for the market.

In a statement, Jim Packer, Lionsgate’s president of worldwide television distribution, stated that Roku, with its 125 million daily users, is the ideal ally for debuting an affordable alternative to more costly SVODs. He explained that this service offers us the potential to rapidly expand our reach and generate new revenue streams through monetization, and we’re honored to be a part of this innovative streaming journey.

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In my perspective, the recent earnings report has undeniably fortified Netflix’s uncontested reign within the realm of streaming platforms. With blockbuster series like “Squid Game” captivating audiences worldwide, and high-profile events such as the Jake Paul vs. Mike Tyson boxing match adding to its allure, it’s no wonder that Netflix continues to dominate the market.

Roku stock declined about 2% on Tuesday morning to $84.24 a share.

Similar to many media firms, Roku underwent a series of workforce adjustments over the past few years. Specifically, in September 2023, they announced a reduction of approximately 10% of their employees, marking their third such reduction within a year. This move was attributed to a perceived weakness in the advertising market.

Though Roku’s platform operations have thrived, their device sales have seen a drop. In the second quarter, Roku reported a net loss of $33.95 million, while generating revenue of $1.1 billion – a 15% increase compared to the same period last year.

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2025-08-05 21:31