Q3 2020 Roku Inc Earnings Call
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Hi, gentlemen, thank you for standing by and welcome to <unk> third quarter 2020 local earnings conference call.
At this time, all participants were going to listen only mode.
After the speaker's presentation, there will be a question and answer session.
Today in our shareholder letter, which is posted on our Investor Relations website at IR Dot Roku Dot com and I encourage you to periodically visit our IR web site for important content.
And financial highlights and discuss our viewpoint looking forward.
We added $2.9 million incremental active accounts in Q3 and ended the quarter with 46 million active accounts up 43% year over year sales.
Three versus roughly 50% year over year in Q2 as advertisers leaned into revenue shifting dollars to streaming as they follow TV viewership and take advantage of increased flexibility given disruptions to the traditional TV upfront process.
The content business benefited from our rapid rate of active account growth as well as strong consumer demand for AD supported viewing subscription services and premium movie rentals.
Reflecting these factors in our content distribution deal model led to some significant increases in the estimated lifetime yield value with an outside portion of that value change accounted for in Q3.
As a reminder, revenue recognition for our content distribution agreements can be lumpy quarter to quarter.
Clear revenue grew 62% year over year, the highest growth rate in over seven years, which was driven by an extraordinary level of player unit growth as mentioned previously.
Given the short term macro environment remains both variable and uncertain.
We are closely tracking the potential for Coca 19, or economic related disruption as well as the potential impact to historical consumer spending levels or shopping patterns as we enter the holiday season.
Instead, we will provide a framework on how we believe the quarter could develop.
With our outstanding Q3 performance. Despite the macro uncertainty we remain confident in our ability to continue to grow our business into the future and believe the pandemic has only accelerated the long term trend towards all DVD streams.
With that let's turn the call over for questions operator.
As a reminder to ask that question, you'll need to press, Taiwan on your telephone to a target question. Please press the pound K. Please standby well we compiled the Q&A roster. Our first question comes from Ralph Tracker with William Blair Carolina, So funny.
You'll value changes in queue for although that's obviously, we do that analysis every quarter. The other thing I'll note just that's factored into those thoughts is the fact that in queue for we are lapping the day to do acquisition, which came on board mid queue for as well as.
<unk> some certain new services in queue for so those are also factors that are that were included in our thinking there.
Okay.
It's the ability to manage reach and frequency broadly across the marketers complete by.
Which strengthens our relationship with those customers as well.
All this growth really a cruise that broke his benefit but also of course, our partners who are participating in putting content into the road could channel. So partner earnings within the Rocchi channel more than doubled in the quarter. So overall really strong performance for the Roku channel as you know an answer.
The Kroger deal has been a very strong deal for us in terms of signaling what we're capable of given our scale and our data.
We mentioned this in the shareholder letter that snow.
Snyder's for example saw a 250% return on AD spend we have a bunch of brands now and.
Leveraging that program and there are lots of opportunities it is a big market.
The key for us as a platform is that that first party customer relationship and and our our reach into our platform with advertising. So we anticipate lots more to come on that CPG became our fastest growing vertical in the quarter just as an indicator of how much potential there is.
Thank you. Our next question comes from Jason Helfstein with Oppenheimer. Your line is open.
Right.
So.
Yes.
Mr. Helping your line is open.
Thank you.
So Steve just can you go into a bit more detail I mean, you called out that you had an you recognize an outsized portion of the content distribution lifetime value in the quarter.
Active accounts as Anthony mentioned, driven by very strong player and TV sales as well as just very strong consumer demand for not only AD supported viewing but also subscription services the premium movie rental business it was pretty nascent.
Has increased with some titles kind of notable titles there and.
And so in this case, we reassess these material deal models every quarter, but what we had was.
A portion of those increase in deal values and so that's reflected in that.
In the quarterly results because when you reflect a out an increase in deal value an outsized portion of that is impacted to the current quarter.
The results can be lumpy with that and certainly you know as a reminder, that is increasing our assumptions for not only the current period, but in future periods as well, which is why that can be lumpy on a quarter to quarter. So.
Again, I think for us.
I would say that that process.
Looking at the deal model is definitely a quarterly part of the business, but it can go.
It can go up or down and in any given quarter a lot of them kind of stay the same.
Jason Let me take the.
The second part of your question without one it's a great question, Let me, let me without getting too frothy here, let me just take it in parts to highlight how big an opportunity. This is free is so port for Roka is so so on the routing platform. We are fast growing of course as an as an AD sales team one view allows us to access.
It's still not and screaming and.
One of the interesting things and a quarter. It was the fact that advertisers are increasingly seeing streaming is something they need to start allocating that'd be your portion of their budget towards so it's still it's still there's still a lot of opportunity.
Because of course, all those ads are gonna switch the screaming eventually and we think they're all gonna be programmatic eventually as well through platforms like one too.
Thank you. Our next question comes from Thomas Forte with da Davidson. Your line is open.
Great. Thanks for taking my question. So I wanted to ask about the maturation of the Eva market. So you talked about the changes to be upfront I thought that adding roku channeled the Amazon fire T V was a real milestone for the company and on its earnings call Amazon did very positive comments about the Eva market and its own.
Efforts. So I wanted to in particular talk about the maturation of Avon, but two things in particular, what do you see as the opportunity for political ads on a board and how did they perform in the quarter and then what are your current thoughts on your international opportunity for Avon. Thanks.
So this is Nancy I'll, just say the Avon is obviously a huge opportunity we're very bullish on it but I think Scott's best equipped to answer those questions.
Yeah, I mean Avon is vital to the O T T business model <unk>. Yeah. You you frame. The question is maturation is that we're reaching maturation I mean, I think it's really still a extremely fast growing and very high potential market, we see that in the the pace of growth.
The Rocha channel itself, we highlighted some stats and and the shareholder letter.
And I think if you look at new service is coming to O T. T majority of them are actually hybrid business models.
They're they're they're they're subscription days, but the keeping the price down and they're augmenting their revenue model through advertising I think also consumers have Ah.
Somewhat limited budget for the number services, they're gonna sign up for their there they're looking to save money as they leave the pay T V ecosystem all to say this just makes AD supported experiences in the O T T environment that much more important you asked about a political you. We we we had a strong.
Participation in that category, our capabilities are a key differentiator for political marketers.
That said it was a relatively modest contribution to an otherwise really big quarter for us in advertising and it was an important segment of a newer segment for us as a as a younger had business a great tended to participate in but certainly not anywhere close to a large share of our overall add business.
And then on the international I can just say a few words on that so.
If you just think big picture, what is our international strategy well a big part of it is a lot of it is to replicate most of it actually replicate what we've done in the U S internationally and and you ask <unk>. We started out by just focusing on building active accounts and then as we started to reach scale layering on monetization options and that's what that's what we're doing.
Internationally as well so we're focused primarily this this phase on.
Building scale and the key markets.
And then as we start to rescale will start to layer on monetization absence of options and that that started but it's still it's still pretty Nathan for example, the rookie channels available in the UK and it's available in Canada, but that's a raw stretching and I would say you know just thinking about Avon I mean.
That's why it is fairly park of pay television is popular in the United States, but in almost all international markets Avon is by far the dominant business model.
Freeze very important worldwide.
Thank you and.
And our next question comes from Mister like a restaurant with Ken about research your line or something.
Thank you so I've been hearing some concerns from investors about the press reports about Walmart.
Selling P V as with Comcast operating system. So it does feel a little bit like this scare from less you have with the expedited flex, but I would appreciate your view.
On how this potentially cannot cannot impact you I'm gonna have one for Steve. Thank you.
Sure. This is Anthony so we are the number one T V O S and the United States and now in Canada.
And you know we've achieved that position despite ah.
A very dynamic marketplace with intense competition from large large tech companies and large T V companies as well.
<unk> and.
<unk>, there's a few reasons. We think we're successful are the most successful in the T V O S business and.
Steve I have a question about one of your revenue recognition I think on the last quarter call you said that.
You recognize that leaves the majority of it on a gross basis and that had an impact on the margin in the quarter and then you said that going forward.
You will be recognized and increasing proportion I would on a net basis. So I was wondering if there was a change in in impact from Q2 to Q3 from that on the margin and the platform segment.
Yes, Hey, there's really yes. Thanks for the question on that Yeah, you're right I mean, what I said was that the historical data do business. There are effectively two parts the kind of typical DSP business, which was a net revenue treatment and then a historical data do managed service business, which was on.
A gross revenue basis and that as part of a.
As Scott mentioned rebranding and in sort of integrating the operations to the one view we were shifting people over to new service agreement.
Well I guess Steven in answer to your question. We are here to sell how marketers want to buy it's why we've got a media business and the DSP.
It's why we also support third party dsps, who want to be buying on the platform.
And.
Really being able to participate in all those different ways of buying that allows us to keep expanding.
The segments that we serve in the AD market.
We are strongest in all of those segments when a market or comes to us and wants to take advantage of our deep first party customer relationship our identity our data on users our ability to optimize in a way that third party AD tech cannot.
And we can employ that value proposition, whether they're buying media from us which for example, many TV marketers do and they are I O guaranteed Nielsen demo driven often when they first come to the platform all the way through to programmatic buys transacted through one view our long term view is that most TV ads.
Tizing this will take years to play out is transacted programmatically.
And.
Referencing back to Laura Martin's call question, that's why we made the move and acquiring data do incorporating the Relaunching. One view is so that we could enable marketers to.
Leverage our unique assets our scale.
Regardless of how they are buying.
So.
I hope that answers your question I think maybe Steve wants to take the second part of your question on the.
More color on the on the revenue front.
Okay.
Yeah, Hey, Steve.
In terms of revenue recognition.
Yes.
Largely on the AD business.
Related to when we run the AD there can be some differences in the the models themselves. So there can be a bit of timing, but it's fairly straightforward and was there a particular question within that yes, I'm, sorry, maybe I talked to see Stephen I think that.
And Steve can you help maybe maybe we need clarification, but I think your question was.
How did they come to the platform is it are they starting from a reach extension strategy or some other case I would say.
You know what for TV marketers their primary reason to come to Ruth you is the loss of reach within the linear paytv ecosystem. They are just whole classes a consumers are simply no longer reachable through through linear television ad buys.
In about half of TV time for adults 18 to 34 have it has moved to streaming those usually just not reachable anymore. So that's typically what brings.
A marketer into the ROE can fold is the desire to keep reaching them on the big screen.
That said with one view, we have the ability of course to help them run and omni channel campaign to reach user first on the television and then retarget them off device.
And we've also seen significant growth in the performance marketing D to C segment of marketers, who have social budgets. They are optimizing each to a bottom funnel outcome a site visit and add the car purchase a product purchase a shopper data shopper data outcome and.
You know those budgets come to us really from a different budget line at the client or taking advantage of our deep data assets and ability to optimize those outcomes. So I wouldn't call those TV dollars as much as performance marketing dollars as a significant growth segment for us.
Thank you. Our next question comes from Jason Basin that with Citi. Your line is open.
Thanks, so much.
You know the buy side is very focused on the pandemic sort of causing a big shift in streaming and digital ad dollars.
And you guys referenced in your letter some of the benefits you got us to the linear TV ecosystem got gummed up with coated my question is how how do you think this plays out once the world goes back to normal do you think prudent investors should be moderate sort of moderating their growth expectations, sometimes next year or do you think the secular trends and all the steps you're taking.
We will just allow you to power right through that without a deceleration. Thanks.
Hi, This is Anthony.
From my point of view I I think what we're seeing is.
That's a trend towards screaming that's been building for years now.
And I think there's a lot of things that are causing to accelerate.
And to continue to be a big trend, whether it's better customer value.
You know more options the ability to save money.
Yes, Theres just a lot lots of content the content that's available on screaming is continuing to build and at this point, there's really nothing you can get by streaming there is in fact, there's more content streaming than there is on traditional pay TV now.
So.
I think that the pandemic certainly.
Helped accelerate that trend to maybe tipped over some things a little bit but that is the trend that what's happening anyway in and will continue to happen for some time, because everyone doesn't screen yet so.
I think we've seen strong growth.
And.
It may moderate a little bit, but I think we're going to continue to see strong growth I don't know Scott did you want to add anything to that yeah.
We're not going back to the way it was the clear I mean, I think kind of a date coded triggered a lasting durable change in house Cmos and marketers are thinking about their their TV AD spend we in Q3, we saw a 17% drop in linear viewing work is up 54%.
92% of road to cord cutters are very satisfied with their decision to cut the cord and are planning to go back. So I really think this is a one way transfer function.
We don't go back to the the older spending patterns because the audience isn't there marketers need to follow the audience into into the city and they stay they stayed because of the enhanced capabilities I think thats really what all.
While this transition is helping teach marketers is there is a better way, there's a more robust tool set in OTI.
We see it in our own stats, nearly 100% retention among advertisers who spend over a million dollars.
These budgets are not flowing back to television.
Traditional having another yet another proof point of that I think is just media companies. How they are how they are increasingly reorganizing around streaming.
Thank you. Our next question comes from Jeffrey ran with Deutsche Bank. Your line is open.
Hey, congrats on a good quarter, how are you guys thinking about advertisers' willingness to spend as the endemic continues and are you seeing certain industries still holding back on advertising spend.
Scott Manteca.
Yes, I mean, certainly there are some segments that are still slow to return the ones you might expect to travel [laughter] quicker.
And essentially Thats loosening would loosen the broader bottleneck, obviously you're seeing.
Nice phone linear today, but the broader bottleneck I'm talking about and then.
A little more micro to what extent did political.
Or it's crowding out effect on nonpolitical spend particularly in October have on your pricing dynamics.
And where is that training now.
Scott.
And the other one yeah.
Yeah, Let me take the measure named question in parts. So one of the reasons we.
Invested in partnered with Nielsen years ago to enable demographic measurement in our platform is so we could provide marketers with a common currency across linear and O T. T. So and we continued to add to that capability.
The ability to measure reach and demographic holistically across linear and O T. T. We lost that cable that capability years ago, we followed that with optimization using our data to target specifically cord cutters and people who are harder to reach linear this year, we followed it up with the ability.
With a guarantee that.
That we would not charge marketers and we reached somebody who had already been reached in linear. So I think we've been the the market leader in providing T V advertisers with a common currency and and frankly, a bridge from linear television into O T T.
I think the really exciting stuff happens after marketers start to invest in O T. T. O T. T is a need is digital platform that enables measurement up and down the funnel. It as an open I am being fast paced platform and and so this enables on any given ad <unk>.
Multiple simultaneous kinds of measurement, we're not we're not headed towards a world where there's a single currency, sometimes when people talk about measurement challenges N O T. T. I think it's because there.
Harking back to a day when there's one currency, we're not headed towards a world where there's one currency there will be many N O T. T will be all the more stronger for it because marketers of all shapes and sizes will be able to pick and choose the currency that they care, most about which best fits their tactic.
And then you asked a question about political ad spend.
You know as I mentioned earlier, it was meaningful and Ah relatively new category for us we weren't particularly active during last congressional or presidential cycle and so it's an area, where we put the good energy into and I think our platform offers powerful capabilities and was very attractive to political advertisers that that it you know it.
Wasn't wasn't a huge portion of our overall business and so if it didn't have a substantial effect on like overall.
Reising or other dynamics.
Thank you and our next question comes from Mark Mahaney with RBC Capricornus online or something.
Yeah, I'm, sorry, I came in a little late you may have already talked about it. So you can be brief international just give us an update on where you are in terms of rolling out both player and platform revenue developing both player and platform revenue in international markets. Thank you.
Hey, Mark this is Anthony I'd be happy to talk about international we didn't touch on it briefly but but just to summarize.
Screaming, obviously is is a large international opportunity and phenomenon, we're making good progress.
I'll just I'll just give you. Some examples you know we were introduced players in Brazil for example.
Following up from our T V lunch several months ago in Brazil, which is off to a great start.
We.
We we introduced the screen bar, which is a new two and one product that I'm Super excited about the stream are basically is a screaming player that also makes the that sound better on your television.
And we lost that products and you ask but also in UK, Canada and Mexico.
And so you know certain markets like in the UK player sales double from the quarter, which was good progress Canada player sales doubled and rookie T. V. You know it's been number one for awhile in the U S. In terms of operating system Smart T V operating system sure.
It's now number one in Canada, So I'm good progress there.
The and then I would say the strength that have made a successful in the United States are working as we use them in other markets as well.
You know if you look at our quarterly results, 43% year over your active account growth, which was which was a great I mean, I I thought that was incredible.
Given the size of the base that we have to go on but that that that active account growth came domestically, but also they were strong international contributions to that account with as well you know our priority is to like.
Like I said, it's a focus on active accounts first bill scale, and then start layering on monetization. So really that is still in most markets scale is still our primary focus we are starting to.
We got small at teens in some markets testing the market, we launched the rookie channel in a few markets like Canada, and U K, but the monetization really will follow them, we're focusing on a scale first.
Thank you next question come from Richard Greenfield.
Like check your line is open.
Hi, Thanks for taking the question I got two one is really a big picture for Anthony you've seen this wave coming for many ways. Many years I've been predicting at the challenge right now for Big media companies a lot of your partners is that sports not only has one of the key parts of that whole ecosystem, but it's also one of the biggest drivers of advertise.
I think a lot of these big media companies are struggling to figure out an economic model for sports to shift the streaming I guess do you have any advice I mean, there's so much money in so many AD dollars tied to sports and it's sort of the the last thing holding up the entire multichannel bundle.
How does sports how do they get sports into the streaming world should they bundle it into existing channels should they have true D to see sports screaming like how would you advise them as they think about sports and then I've got a follow up on the Roku channel.
Sure well I mean, I think I think well first of all you can't get sports and screaming I mean, it's still part of the bundled like you said you have to sign up for virtual M. V. P. D. Usually I mean, you know I I there's.
There's complicated deals multi year tenure deals and sports that I'm not really an expert in but if I could wave my hand, I would sure I think the best thing for sports would be for them to start selling selling as far as services for you know like for <unk>.
Regional sports networks isn't that slot service or.
N F L as as far as service I mean, that's what that's I think the way consumers wanted to sign up and consume Sportscenter screaming world. That's how they sign up it doesn't seem other screen on it.
All the card basis.
Yeah, not a rich I'll just add to Anthony Anthony is point Yeah. Great question I don't think we have a short answer for it but it just a couple of staff that you might find interesting January to September so I sort of bridging sports going away and coming back heavy sports fans on the road could platform dropped their linear viewing 26%.
They're they're streaming 17% so even as sports came back viewership didn't come back among heavy N F. L viewers, we saw a 29% drop in linear and a 16% increase in streaming so the the disappearance of sports during covid kind of accelerated the pressure.
On that vertical in.
In the streaming and and the the the viewership and and I think ultimately the dollars you're not gonna come back in the same way long term.
And that's exactly what we're seeing in terms of the impact on ratings and that's why I feel like they have to figure it out so I I appreciate that answer the other one Scott you've talked before about the fact that roughly three people per in a way when we look at the Roku channel numbers you released in terms of yours roughly three people per household is sort of the metrics or when you're trying to think about it relative to your active account base. So.
If I look at 54 million people, who watch Roku channel or reach Roku channel, that's like 18 million households, or roughly 40% almost of your base of Roku active accounts.
What do you need to do to get that base up from 40% to 75 or 80 per cent, let alone 100% like is it is it purely the content is it awareness of the Roku channel like how do you bridge that gap.
I think <unk>. Yeah. Go ahead go ahead, <unk> and I was just gonna say like you know that's that's getting to a big number like 100 per cent penetration is obviously our goal and that's that's what we've been working on it from the beginning I mean rookie channel started out tiny started out with a thousand pieces of content very small number of users.
There's this virtuous cycle, where we promoted we on board more content, we get more users we get more advertisers then we'd get more content with you more promotional you get a bigger title and so that that that's gonna, we're just going through that uhm virtuous cycle, and it's getting bigger and bigger as a result, it's the you know the it's the fastest growing top 10 app on the rookie.
Out for him right now so it's you know I'm confident we can get we can keep growing the rookie channels still still pretty small compared to where it can be.
And when you say top 10, Anthony that minutes watched or times used or what's the best way of thinking about that metric.
Reach and the hours.
Yeah, both perfect Yeah, yeah. Thank you both.
Thank you. Thank you. Our next question comes from then Sandburg with Morgan Stanley Your line of separate.
Thank you have a good afternoon.
Scott about social budget to whether you think you're taking sure. There are some of your peers are competitors. This earning cycle I've talked about a shift in social spend on to other platforms that are viewed as more brand safe and it would seem like that could be or is and could be a huge.
Opportunity for Roku. So I'm, just wondering if that benefited the quarter something that you're focused on even further kind of differentiating your platform versus some of those you know massive digital budgets out there.
And then I wanted to ask Steve.
Just on the guidance for Q4.
I'm doing the math right here guiding to platform revenue growth in the mid fifties or so is that deceleration just because you don't have the sort of six O. Six impact that you had in three Q just looking for any color there. Thank you both.
Hey, then I'll take the first part of your question, Yeah, I mean I do.
Fundamentally think that we are able to compete for social budget. So we don't always know, which pocket the marketers drawing the money from but but we had heard clearly that you know both cause it's exogenously factors you know pricing pressure.
What what's going on in the social platforms as well like maybe more importantly, the fact that we have the capabilities to optimize to the outcomes with these markers are focused on T. V. Just never been able to compete there and so that's why our performance marketing segment Wow Wow still early is.
Growing much faster than her overall add business and I think by the way. That's one of the most interesting things about O T. T. Advertising is it is just gonna be a branding media or performance media, it's gonna be both all at the same time, it really isn't an analog in any other media out there linear T v's going to remain a top bottle branding media social media is very.
Much of bottom funnel O T. T has the opportunity to be both and it just is gonna make for a very rich ecosystem as well as the opportunity to tap into very very large budgets not just television but also digital.
It's got just to follow up quickly on performance How're you Doin' execution is that something that you're you're able to tie back to mobile cross platform to really connect you know close the loop for advertisers and performance.
Yes, it's it's a mix of both first party and third party, we have a wide array of third party attribution partners, we have our own pixel and so marketers can can pick their preferred solution.
In one you you know we can automatically optimize two pixel placed on it advertiser's website you know according to the C. P. A S. A performance target data marketer provides to us.
Thank you and our last question I guess I'm just haven.
I'm sorry, there was a part two on that question, yeah, sorry upgraded or the parts I've been questionnaire that I wanted it.
Yeah I've been so just just on queue for so just just for the good to the order we didn't provide any formal guidance.
But in terms of some of the color we gave in terms of.
How we're thinking about how to afford a good look foreign in any of these significant external factors that could impact the short term uhm, what I would say about popcorn revenue. It's certainly we talked about how the content distribution deal you'll revenue recognition can be lumpy court reporter the other factors.
That we talked about then or bathroom specific what specifically lapping the David do actors assume which came into the came into the results kind of mid two four of last name as well as we're lapping some some launches a new services from Q4 last year.
Thank you and our last question comes from.
Better Terrier with Bank of America. Your line is open hi, Thanks for taking my questions and the congrats on the strong quarter. Just two quick ones. If I can squeeze them and just one on the Roku channel again, so you've done a great job increasing the reach of the channel.
Steve If you can just talk about you know how the AD load. This training on the channel are you happy with that load as it is today is there room for growth and can you address the C. P. M. Do you think you can maintain the C. P M a N.
You know some investors, saying that over time that is to go down but you just your thoughts on that and the second question is.
Just an international expansion Internet that you've done a great job in the U S. You've got great distribution relationships. When we look at internationally. That's a more fragmented market. So are you having to hire more people on the ground who have these relationships and then in that vein how should we think about opic's going forward. Thank you.
So I think the first question is actually for Scott on Trc and add loads and P. M.
Yeah, I'll I'll I'll take that first question, where we're quite happy with our recipe of half the load of linear television. We think it strikes the right balance between a great consumer experience, while also providing strong monetization opportunities. So we're not planning to tinker with that I think there's lots.
Upside potential in terms of how valuable we make that inventory as well as opportunities beyond 15.
<unk> 15, and 32nd spots you know, we we've done some work in the market with pause adds another AD unit. So I I think it's a great consumer experience.
As delivered today regarding your question about C. P. M. O T. T is just a bed or higher performance product and so I think it does reasonably command higher C. P. M is relative to say linear television that said you know I don't think you know going back to the prior question I don't think there's longterm one.
Single C. P M to rule them all in the long run in O T T lots of different marketers top to bottom of the final come into the ecosystem and compete in a calm an option for four AD inventory and just like you see in social media platforms. You don't end up with a singular C. P M across.
All users and all all all content that is one of the things I think it's most interesting longterm about the about the O T. T media there was a second part to the question I think Anthony ticket.
Yeah, I can take the international questions. So you know F. So first of all I, just reiterate that we're making good progress internationally.
And yes. It was a <unk> it is a fragmented more Franklin a market because then I would say and big part because roku with not in those companies countries. Yet. So asked me the entered countries and brought the full portfolio of our assets, where we're gaining market share and consulting a lot of the of the market around Roku. So for example.
Simple you know, Canada I'm in a small country, but it was the first one we went into after the U S and now we're number one the T V's in our player market shares very high you know.
We have an AD sales team there. So you know it's starting to look a lot like the U S for us but in terms of investment International is one of our key strategic investment areas and we do obviously it takes people to do it well we <unk> the way we focus as we we pick our focus countries, which we keep expanding and then we make sure that.
Have local content. So we <unk>, we have we hire local people to do local content deals. We make sure we have local retailer relationships you know getting into local channels local distribution channels, we bring rookie T V. The market, which requires a lot of localization, but also many cases specific features that are regulated to require.
Feared by the government.
You know so we'd add those we we.
We bring their we bring our players to market, we bring our audio audio for television products to market can you bring the the whole portfolio of products and offer just a very complete billing solution. That's.
And that's what and then our market starts starts to grow so that's that's what that's what we're doing.
Thank you for working now.
Thank you at this time I'd like to turn the call back over to you Mr. Anthony would for any closing comments.
Thank you operator.
I'd like to close by reiterating how pleased we are with this quarter's results and wrap up with two concluding points.
First reaching 46 million active accounts at 43% year over year growth rate shows rookies momentum.
It reveals rookie scale relative traditional pay television providers, you continue to lose subscribers during the quarter.
The pandemic is accelerating the shift away from traditional pay T V. I'm confident that the shift the streaming will be permanent for the vast majority of consumers.
Second the strength of our financial results illustrates the leverage of our business model.
The leverage our business model may deliver over a longer term as we continued to execute our strategic plan.
Hope you and your family stay safe and enjoy the upcoming holidays. Thanks again for joining the call and happy screaming.
Ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
Mhm.
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