Roku’s 2025 Predictions – A Q&A With Tedd Cittadine

Rocco It has just been released 2025 forecast report. Ted CitadineRoku’s senior vice president of streaming service partnerships spoke with Streaming Media Tyler Nesler About their key findings, including the impact of price increases on audience retention, the effectiveness of ad-supported tiers, the importance of bundling strategies to meet consumer demand for flexibility, and the growing importance of sports programming in driving subscriptions.

This interview has been edited for length and clarity.

Ted Citadine

Tyler Nessler: What kind of impact will price increases have on audience retention, and what kind of uncertainties are there for the market going forward through 2025?

Ted Citadine: Starting in 2022, we’ve seen some significant price increases across the industry. I think our content partners are finding that they’re starting to reach the bottom line of price constraints for consumers. From our research, they have reached the point where the disruption they cause outweighs the increases. It will be very difficult in 2025 to convince consumers that they can get the same price increases and rises that they have seen in the past every year or so. The math won’t work anymore. There is some third party research on this pneumaticIn the last 30 months, we’ve seen a 40% increase in churn across these services. Therefore, it will be very difficult to convince the consumer that price increases would make sense, at least on a standalone basis.

Ten: How can providers experiment with new pricing tiers, incentives, and bundling strategies more aggressively? What are some of the innovations you see in this area?

H: Starting a year and a half ago, we saw the differentiation between ad-supported tiers as a way to provide the consumer with a lower introductory price point. This certainly resonated with our users, and this was a way for our content partners to offer lower upfront price points but have the advertising components offset the average revenue per user (ARPU). That was a great win for our partners, and that’s why we saw it Netflix, Disneyand Amazon Enter these ad tiers, which are generally still lower price points that are beneficial to the consumer but are filled with advertising.

We can argue about whether this is a good or bad thing, but now the price increases for ad-free tiers continue to escalate. Netflix is ​​a good example, as they kept their ad price low, around $7, but then removed the middle levels. According to Antenna, about 45% of consumers are completely intolerant of ads. So they will continue to pay higher and higher prices for ad levels until the limit, but it has been proven historically that the other 55% are quite happy to enter ad-supported services. Thus the ad-supported price point was an innovation in the industry. Early on, Roku believed that advertising and live streaming went hand in hand. We gave our Roku channel Eight years ago. This has been hugely successful.

The second innovation we’re seeing is bundling, where combining multiple services helps consumers lower the actual price point. The packages have shown a lower rate of decline, giving consumers more benefit and value. [But] At some point, we have to make sure that consumers actually want these packages, and we’re not just making things that people don’t want at a higher price point. The packages we now offer are good for consumer value and are very popular. Roku was the first platform to offer Disney’s Roku acquisition package for our billing systems. We therefore strongly advocate offering services to consumers directly in our subscription business or with our partners and offering affordable packages.

Trinidad and Tobago: The sports space has increased dramatically over the past year, especially with fan engagement opportunities. What barriers remain for rights holders to embrace the live-first ethos? It seems that not so long ago, there were complex human rights issues. This seems to be diminishing now, but do you see it?

H: It’s a really good question. I think we’re seeing companies becoming more aggressive in streaming sports today, due to the huge growth in subscriptions over the past couple of years. peacock and Paramount+ They are among our best performers. For example, it’s no coincidence that NFL content has driven much of this growth. Peacock also has a great showcase for the Olympics, and we did a pretty big Olympics home screen integration with them that was very successful.

Sports are expensive from a rights holder’s perspective, but I think they’re learning that leads to significant increases in streaming subscriptions. They don’t reserve this content for traditional television; They are now making it available in full force on live streaming. And so Roku welcomes that with open arms. We are very optimistic about rights holders now being more inclined to stream content.

I think the way Roku can add value is to be a platform that helps people discover all this sports content because you’ll have a bunch of different sports services that offer the services, and it’s going to be very complicated for users to try to find it all. our Sports area Destination depends [search utility] From a consumer perspective, this is where we really think we can add value.

TN: Do you have any thoughts on the cost advantages of sports programming versus scripted television? Even with the recent rights issues, do you think that’s offset by streamers having to produce less original content or having to rely more heavily on creating original programming? With matches, critical reviews are not as relevant as they are with scripting. People will watch their favorite team no matter what.

H: certainly. It’s a great balance of original written programming. Even Netflix usually has some kind of resistance sports but now they are participating in these big events, e.g [Paul/Tyson] He fights. I think it makes sense to them. There is nothing real in live streaming other than sports that can bring together a [large and live] The audience is like that. It’s also a great way to register a group of users, and it’s a great way to deliver ads to a large audience. That’s why I believe sports will become an even more important part of a content creator’s arsenal in the future. I’m very optimistic about where this will go, and I think we’ll see more partners like Netflix and others to create the zeitgeist through these big events that can only be done through sports.

TN: Is there anything else you can add and anticipate for 2025 that could be particularly innovative?

H: Making subscriptions accessible to everyone will be essential. I think it’s sometimes difficult to manage your subscriptions today, and Roku would like to be able to provide better utility in how you subscribe. So, if you want to subscribe for three months or one series, we’d love to have that concept. Or, if you want to create your own package or have more flexible packages, we would love to have this concept. Even making your subscriptions more transparent. Sometimes, people lose track of their subscriptions.

It will make it easier to do all of these things, make it transparent and more functional, and make it easier to turn on, off, pause, and then collect subscriptions in one place. I think people are looking for good value and collecting in easier ways. This is the next innovation that streamers like us can do: make it easier for people to manage all of this.

Charts courtesy of Roku.

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