How Roku Is Moving Beyond the 30 Sec. Ad Spot

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Alexis: Hello and welcome to The Shake Up, where we explore the business decisions that dare to be different and the leaders who are shaking up their industries.

Brianne: Each episode we'll bring in research and data backed insights to worm our way into the minds of business leaders and learn how they make the decisions that challenge the status quo.

Alexis: And then we talk with the folks who are disrupting their industries. You can support the show by following us on Apple Podcast, Spotify, and everywhere you listen to podcasts. Okay. So today we have a really interesting episode that I'm very excited and have been excited to talk about for a while. We, later in the show, will be talking with Dan Robbins, the VP of ad marketing and partner solutions at Roku. The devices and platform for basically all your streaming needs that's now grown to$ 1. 7 billion in revenue.

Brianne: I'm really excited for this conversation with Dan. He's leading Roku to a fundamentally new way of creating content. So they're moving beyond the traditional 30 second ad spot for better brand engagement.

Alexis: Love that. Also, this is probably not going to be the first time I say this on this podcast episode, but I hate ads. So I'm very excited to hear how we're moving beyond the traditional 30 second ad spot.

Brianne: Yeah. Absolutely. And we're going to talk about the creator economy and all of these new trends that are happening in business. And Dan's really leading the charge at Roku, which quite frankly already has insane distribution. So we'll be able to talk about the history of Roku and where they're going and how they are delivering a whole new value prop for brands.

Alexis: A hundred percent. Also, is it even a business podcast in 2021 if you don't use the phrase creator economy.

Brianne: I know, right?

Alexis: Oh, that was a genuine laugh. Awesome. Okay. All right. Let's dive in. So you know what's interesting, right? When streaming came on the scene, this started as a niche idea, something that people who were self- proclaimed cord cutters could indulge in to get rid of their high, monthly cable bill, and instead stream shows on their computer and then later in- home devices. I used to be able to tell you exactly what network every show belonged to, exactly where I was watching it. And now you almost sort of sit down in your living room or you sit down with a friend to watch something and you just assume you can access the content. I learned recently that 62% of adults subscribed to a streaming in the US. Apparently, over half of these viewers said they don't mind ads or even like seeing ads when watching TV, especially if it supports free content. Brianne, what is wrong with these people? That's my question to you.

Brianne: I mean, Is it supporting free content? I feel like I'm paying for all these subscription services. So the last thing I want to see as an ad. So I'm very excited for our conversation later because something that took me a while to figure out and I'm still not sure if I fully understand is Quibi. Quibi was short format original content, but it's like in my brain I'm like, is this an ad? Is there enough time for you to actually write a narrative and have some substance? And so I'm excited to learn a little bit more about that format because quite frankly, I never understood it.

Alexis: Pour one out for Quibi. RIP for sure. I think that you bring up a great point, which is the seven minutes, right? On Quibi, quick bites, is a really short amount of time to have ads, at least in the traditional sense. There's a ratio I'm willing to tolerate of ad to content, and if you broach that ratio, I am over it.

Brianne: Yeah. Absolutely. Well, and a lot of the shows that I'm watching on YouTube, many of them are already sponsored by a brand. And so I naturally feel like the show itself already has some sort of advertorial angle. And so the fact that there's an ad layered on top of that, it's just a little bit of brand overload for me.

Alexis: Yes. I love this point that you're bringing up because I think there's an important differentiation I want to make here, which is that I may be vehemently anti- ad as a viewer, but I am not anti- ad or sponsor relationship to power and fund content.

Brianne: I was recently rereading Attention Merchants by Tim Wu, and there's an interesting quote which I absolutely love, which says," When an online service is free, you're not the customer, you're the product."

Alexis: Yes. Truly. I think that in order to get good, interesting, sometimes innovative creative work made, you need money to do that. And a lot of creators don't have the cash on hand to fund some of the things that they want to do.

Brianne: For better or for worse, our time that's spent on Instagram or our time that's spent on Facebook, it's like the reason brands are spending a lot of money on advertising on Instagram is because our eyeballs and our attention is really valuable.

Alexis: I want to go back to watching TV for a little bit because I want to talk to you a little bit about the story behind Roku. Are you familiar with this?

Brianne: I'm actually not.

Alexis: This absolutely blew my mind. Okay. So let's go back in time to the 1990s, a man named Anthony Wood, who is an English billionaire and ultimately the founder of Roku invented the DVR. Did you ever have a DVR?

Brianne: I did.

Alexis: Me too. Can I tell you one of the most embarrassing things that I ever DVRd?

Brianne: Sure.

Alexis: I used to DVR Room Raiders on MTV.

Brianne: Oh, so good.

Alexis: Okay. So thank you Anthony Wood for inventing the DVR so that I could watch Room Raiders. So it was in the'90s and in doing so he set up the brand Replay TV, which was successful, but had a lot of competition from TiVo, which was the DVR that I had. A few years later in 2001, Wood sold Replay TV after cable providers stopped fighting against the use of DVRs and they sort of decided to lean into them and incorporate them into their own devices. What I thought was interesting about that moment in the story is that it sort of reminds me of how networks have slowly come around to streaming as the main delivery mechanism for their content, instead of this thing that they're trying to prevent people from accessing. In 2007, Wood became VP at Netflix, where the team was working on a top secret, at the time, Netflix Player. And then in December 2007, the Netflix Player was almost ready for launch, but CEO Reed Hastings pulled the plug due to fear of making future partnerships with hardware producers difficult. I couldn't believe that, we almost had a Netflix Player.

Brianne: I mean, in today's era Netflix has such a strong brand. I wonder how the world would be different if that product existed today.

Alexis: I'm glad that this didn't happen. The reason I'm glad that this didn't happen though, is that I think making a big move into hardware could have distracted Netflix from its big move into original content. And I've been so excited by the way that Netflix has really reinvented how a distribution platform can become a content producer itself, that I'm kind of grateful they didn't take this dive into hardware, which is a totally different animal. And at the time in a bid to keep Netflix at the top of the digital subscription game, the Netflix player was handed over to Roku and that all happened in 2008. It was realized as the first device that allowed customers to stream Netflix's new watch now service. So fast forward a few more years, and then in 2014 Roku TV came out, which was their take on a smart TV. Okay. Fast forward just a few more years, 2017 Roku goes public with a valuation of$ 1. 3 billion. They've come a long way since the DVR.

Brianne: Yeah. Absolutely. I mean, and their market cap today is somewhere around 55 billion.

Alexis: Casual.

Brianne: Casual.

Alexis: At the time they had 41% of market share. Wow.

Brianne: Yeah. That's really impressive.

Alexis: That's high.

Brianne: I mean, it's interesting to see this evolution of Roku. I mean, this definitely speaks a lot to their leadership. I think if you get comfortable in only doing hardware, then that would've meant a certain valuation now that they've moved into original content. And the conversation that we're about to have, I'm super excited to learn about some of these new formats because it does seem like they've done an amazing job of really bringing on innovative leaders who ask really hard questions and they're not afraid to push back and experiment with new formats.

Alexis: Yeah. I think that absolutely has to be true given how many different iterations we've seen from Roku now. And that's something that I know we're going to talk to Dan about. So I agree. I'm excited. Okay. So they go public, huge valuation, even bigger market cap now, as you mentioned. Let's talk a little bit about what they're doing that's different as it relates to ads. In 2019 Roku reported 1. 1 billion in total revenue, which included two segments. One was devised as an accessory, so hardware like we're saying. That was 34% of total revenue. But then the other is ads and commissions, which is 66% of their total revenue in 2019. So 66%, two thirds of their revenue is coming from ads and commissions. Which is interesting because I think that now that we've looked a little bit at the history of Roku looking forward so many years, that's kind of a surprising amount of their money to be coming from ads, don't you think?

Brianne: Yeah. Absolutely. It's interesting as well because we're going to talk about the Roku brand studio. And I think the studio model is something that's really different. It's not just traditional ad sales, they actually have a very people heavy model where they have creative directors and people that are collaborating directly with brands to come up with this original content, which I think is really cool.

Alexis: Mm- hmm( affirmative). Okay. So let's talk a little bit about ads in general, my fav topic. Oh, this is very interesting to me that the different streaming platforms, by the way, tend to have different minutes of ad time per hour. So Peacock, NBCs streaming service, they have fewer than five minutes of ad time per hour, Hulu has nine to 10 minutes per hour, and HBO max, when, if they go down this road may have as little as two to four minutes per hour. And oh, Linear TV can have 15 minutes of non programming content every hour for context.

Brianne: Wow. That's really interesting. I mean, with Hulu as an example, I mean, they are starting to do a lot more original content. So I wonder if some of these costs or these additional ad placements are a way to create more original content and really fund some of the more innovative aspects of their business. I think HBO is a great example where consumers are used to paying for HBO and so it's one of these things where they've kind of been paid to play from the beginning, which is very different from something like an NBC.

Alexis: Totally. Which is why, honestly, I just really hope HBO Max doesn't go down this path. I'm saying it now. I'm putting it out there. That's my hot take controversial opinion, HBO is supposed to be different.

Brianne: It's true. I mean, HBO still has, I mean, amazing shows and it feels like they've continued to... I would say, of all the networks, they've done a really great job of staying very true to traditional filmmaking. It does feel like the production value is still there, they're really beautifully written shows. I think that they've kept a really high quality bar and so I do give them credit for that.

Alexis: Absolutely. I've always equated HBO, Home Box Office, it's not TV it's HBO. I mean, this was their whole brand promise. I'm going to be very sad if we see ads. So I just think it's very interesting to see how much of a role that ads are still playing in the streaming service ecosystem. To be totally honest, I find frustrating for more reasons than just, I don't like watching them. The other reason is that sometimes I get frustrated when we have all of these incredible technological innovations and advances and then in order to fund them and get them in the hands of people all across the globe, we apply the same archaic models. It feels like," Oh, well this worked. Let's do it again." But the technology and the distribution was so innovative and interesting. Let's do something different.

Brianne: Yeah. To me it feels like a lazy answer. It feels like a group of people sitting in a boardroom and when you're thinking through hard conversations around monetization, where do you go? You go to ads because that's what's been done before, it's a proven strategy, you know that it's going to work, it's something you can easily pitch to brands. That's why I'm really excited to have the conversation with Dan because I am very curious how these early conversations inside Roku went. Because the vision-

Alexis: Yeah. That's a good point.

Brianne: Yeah. To build a brand studio and to acquire some of Quibi's content and to take this leap, I think they've had some really hard conversations internally.

Alexis: Yeah. I think that must be true. Also, it's funny, you mentioned Quibi because I was just thinking to myself, I'm over here raging against the ad machine and then I'm like," People need to be innovative." And then when Quibi came out I was like," Oh no. Not this."

Brianne: Well, and I think Quibi's a really good example where oftentimes money isn't the only factor in making something successful. You can raise all the money in the world, you can have all of the A- list celebrities, it really comes down to what are consumers willing to watch and what are they willing to pay for.

Alexis: Totally agree. And in my opinion, I think you're getting it exactly right about why Quibi, though it had all the funding in the world and it had literally every celebrity that would be exciting to watch and it just didn't work out because that marriage, that relationship between what consumers wanted and what they were willing to pay for, it just wasn't there.

Brianne: I mean, I remember the headlines when Quibi was shutting down where Katzenberg had essentially blamed the pandemic and saying," This is a format that was designed for people that were commuting on buses and trains and sitting at the doctor's office." And yes, that may be true in some scenarios, but also I think when you're essentially creating a fundamentally new way to spend your free time and to be entertained, you have to make sure that your goals are aligned with the goals of your consumers.

Alexis: Yeah. I saw those headlines about," Oh, well it was meant for people sitting on the subway." And I do wonder, I mean, in an alternate reality where the pandemic didn't happen, would we be interviewing someone from Quibi right now talking to them about their wildly successful platform? I don't know.

Brianne: I don't know. I mean, it's been interesting to see and even pre pandemic how many of your friends would binge watch an entire season of a show or get caught up on a show. I think as long as there's really quality content and as long as there's something that keeps bringing you back, there has to be this re- engagement hook where you're like," I can't think or work or go outside until I watch that next episode." You need scripted content and you need cliffhangers, basically, to keep bringing people back.

Alexis: Yeah. You're totally right about that. As ad spend has increased, like I was saying, strategy and development needs to keep scaling to meet demand. So what do you think is necessary in order to make sure that that's happening?

Brianne: Yeah. It's an interesting question. I'm curious to see how brands co- create with Roku because at the end of the day, they are looking for brand recall, they are looking for ways for consumers to click on some sort of ad. I also firmly believe that creativity really builds credibility. And what I mean by that is it's very easy to run an ad campaign on Instagram, Twitter, all of the social platforms. You're not going to win any sort of creativity award for doing so. And so I do think the brands that are early adopters of these original series that are co- created with Roku, they are testing a new format, they are taking on some risk, but I also think that they will be rewarded for that from a consumer point of view.

Alexis: Wow. Creativity breeds credibility. I cannot imagine ending on anything better than that. Brianne, get ready for this it's time for an ad. Today's episode is sponsored by those fine folks over at HubSpot. Managing conversations with prospects and customers and creating remarkable experience can be tough. HubSpot wants to change that. That's why they created a CRM platform that makes it easy to align across teams.

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Alexis: The result, all your customer people can align around the same goals. Consistently great customer journeys that drive growth and lifetime loyalty. Learn more about how you can scale your company without scaling complexity at hubspot. com. We're back. Oh, I am so excited for today's guest. He's the VP of marketing and partner solutions at Dan Robbins. Welcome to The Shake Up.

Dan Robbins: Thank you for having me. I'm excited to be here.

Alexis: Hell, yeah.

Brianne: Awesome.

Alexis: I'm super excited. As a human being living in 2021, I do feel like I've been doing a lot of streaming. And so my first question for you, Dan, is what are you streaming these days?

Dan Robbins: So I just finished streaming Loki on Disney +, which was incredible. And even if you're not a Marvel fan, I highly recommend it. It's very well done.

Alexis: Really? Okay. I'm happy to hear that.

Dan Robbins: The second thing that I'm streaming is a Roku original called Free Rayshawn, which is a short form TV show that walks through a crime drama. And I won't put any more than that, but I also highly recommend it as well.

Alexis: Okay. A little intrigue. So let's dive in a little bit to talking around how ads have changed over time. Roku, of course, launched in 2002, mostly known as a hardware device at the time. And it sounds like the original strategy has really evolved a lot from that moment. Can you tell me a little bit about how you think about Roku's audience development right now?

Dan Robbins: Sure. Over the last few years we've also expanded into a platform business, which means that we help not only content owners better monetize the channels and movies and TV that they have, but we also help advertisers and marketers reach their consumers in a TV streaming environment. And our mission and thesis ultimately is that all TV will be streamed. And so as a result, all TV ads will also be streamed and it makes it a super exciting time to be in the TV business because more folks are streaming than ever before. One in three Americans don't have pay TV or cable and so it's a really interesting replatforming of the larger screen in the home.

Alexis: Absolutely. So on that note of how advertising has sort of changed over time, I'm interested in what exactly you think brands should be looking at when deciding on their streaming ad strategies.

Dan Robbins: When you think about advertising, historically, you've got traditional mediums like print and newspapers and television and radio, and then you have digital mediums like search and social and shopper marketing online and performance. What's most exciting about TV streaming is it really sits in the middle of those. And so you're getting the branding power of traditional TV and then you're also getting all of the performance that you would see in digital advertising. Targeting your ad one- to- one to the right person, measuring performance and attribution. And for marketers that are starting to move from traditional TV into TV streaming or who grew up on Facebook or Instagram or Google, and are now expanding onto the big screen, TV streaming sits right in the middle of it. And that's why it's such an interesting opportunity.

Alexis: Definitely feels like we've come a long way from the old marketing adage of 50% of your advertising doesn't do anything, but you won't be able to know which 50%.

Dan Robbins: Absolutely. And I think what's exciting about this is it's taking that and moving it also into those channels where that historically has been true. Traditional TV, you can't really measure outcomes and performance in that way.

Alexis: Right. That's interesting. And when we talk about ads on streaming, I'm curious because the first thing that, of course, comes to mind for me is the 30 second ad spot, the classic, iconic, in the TV advertising space. And I'm very aware that major streaming services like HBO Max and Netflix are in the early testing stages of building out ad supported tiers, similar to how Hulu for example operates right now. I'm curious, it sounds to me like Roku is moving beyond that type of format or perhaps bypassing it entirely to move instead towards original content. Was that a conscious choice or something that happened over time?

Dan Robbins: It's absolutely been a conscious choice. And I think it's helpful actually to roll back and think about the way advertising evolves over time as technology changes. And generally, the advertising creative takes what exists and moves it into a new medium. So to give an example, the first TV ads were just radio ads that were read out on screen. And the first radio ads were just print ads that were read out as audio on a broadcast. And so the first TV streaming ads were really just 15 and 30 second video TV spots that were moved into streaming. And so the first question which we often get is," Well, where do the ads actually go on Roku?" Most of it is 15 and 30 second video ads that run in the hundreds of ad supported channels that exist on our platform. So you're watching a movie or a TV show and there's a short ad break and that's where the advertising shows up. So if you think about where maybe video advertising exists in TV streaming today, the ad loads are shorter. If you watch broadcasts or cable TV, you probably know as a viewer that those ad loads are about 14 to 16 minutes per hour, which is a lot. Again, you've got that 15 or 30 second spot in TV streaming, but what's different is that there's a lighter ad load, which means it's better for the consumer. It's also better for the marketer because they're more likely to stand out, there's less clutter. The second difference is that the audience is younger, more diverse, more likely to be cordless and not reachable on traditional TV. And then the third thing again is that digital targeting and attribution that doesn't exist in traditional TV. But what we're really excited about is not only is a really interesting opportunity for video advertising and traditional TV creative, but there's also this amazing opportunity to go beyond the 30 second spot. And so we launched the Roku brand studio with this mission in mind to help marketers go beyond chaired traditional TV creative. And what we've seen is that our streamers and consumers actually aren't averse to advertising. What they're really looking for is a good user experience and a fair value exchange. And the brand studio is about how do we create short form content, short television, interactive ad experiences, all sorts of new things that can help move that forward. And the first two examples of this are we launched Roku Recommends, which is a weekly 15 minute show that helps streamers find what to watch on our platform. We've got thousands of channels and we brought on Maria Menounos and Andrew Hawkins from the NFL to help break down the top five picks based on the data and the trends that we see. And it's been tremendously successful so far. And there are brands like Walmart and Geico and others who are basically showing up in that show in a way that you couldn't, let's say, in a traditional TV break. You're going beyond that traditional ad experience, which means you're more likely to drive a brand equity and to deliver a value exchange to the streamer, which is what they're looking for.

Alexis: I want to understand a little bit more from the Roku side of things because in offering this opportunity to brands, Roku is doing something very different. And when making this decision, are you thinking in your head like," Well, if this is true then why is HBO and Netflix pushing traditional 30 second stuff then?"

Dan Robbins: Well, I think to come back to the question of how we maybe came to this decision and why we think it's interesting. We launched The Roku Channel a few years ago, which is our owned and operated channel on the Roku platform. And it was born from a consumer insight that free was the number one searched for term on roku. com. And so The Roku Channel launched with licensed movies and television shows several years ago. We saw really tremendous success and then expanded to a live TV guide, so it kind of looks like traditional TV where you've got schedules and windows. We expanded to kids and family, so that there was family friendly and safe content for homes to watch for free. We expanded to the Spanish language. And most recently we expanded to Roku Originals, which brings more than 30 short TV quality shows from stars like Chrissy Teigen and Darren Criss and Laurence Fishburne and Kevin Hart for free, no sign up, no strings attached, nothing required, but just a click right from the home screen. And all of this is interesting and it's important because ad supported viewing is growing the fastest of any category on our platform. The second point I just want to hit on to come to your question about other channels is we also, as a platform, look at that on the flip side, which is to say how do we actually help our channel partners make the most of their businesses? And we do that really in two ways. The first is that as America's number one TV streaming platform, we give them the tools to help actually find their audience and engage them. So whether that is running an ad to help somebody subscribe or try a free trial of a service, running media and marketing to help them promote the launch of a new show, running win- back and engagement marketing, so they can retain those viewers or subscribers once they have them. And then we also on the other end help those services take all of the tools, whether it's the data, the ad products, et cetera. And we actually help those media companies also use them as well. And our thesis here really is that we want to help the entire TV streaming ecosystem succeed.

Brianne: Wow. That's really interesting. I'd love to go back to maybe the insight on the most search term was free. How did that insight come about? What were some of the early conversations that were happening at Roku?

Dan Robbins: Well, I think what's exciting and what it's a good testament for is that as a business, everything we do is really data- driven and that's not just about serving the right ads to the right person, it's also about the consumer experience. And so we keep a very close look at what are consumers streaming? What are they telling us about their experience? And then how do we, as a platform bring value to all of the constituents that are on Roku, the consumer, the content owner, the advertiser to do that? So for instance, TurboTax has long been a sponsor of March Madness. They've looked at where the consumer is going, which is TV streaming. And so what inaudible has said," Okay. Look, this is an important time of year for us. We know consumers are going to TV streaming. And so how do we, again, go beyond the 30 second spot?" And so what they actually helped create on the Roku platform this past year was a March Madness editorial hub. It included content from The Players' Tribune, where to watch guides, so you had an easy way to figure out where to stream the big game. It actually expanded with an augmented reality lens, so that you could use AR on your phone to shoot a basketball onto the TV screen, that then transformed into a hoop and try to beat the buzzer. And so as we started to do these different kind of creative marketing experiences, we realized that there was both an appetite from the consumer and the marketer to do something different. And that was really what went into the decision here, but the data and the validation that we see an interest in the marketplace.

Alexis: I have a lot of questions about data- driven decision- making at Roku. I'm curious about as an individual, even if you've got all the data, even if your deck is like, I have a lit 17 slide deck full of data, consumers are going to love this, but you're still maybe pitching or positioning something that's totally never been done before. What is your personal approach to pitching a new idea like that?

Dan Robbins: Well, I'm a research and data nerd at heart. And before I got into marketing I came up through measurement and research. And to me, the big thing with research has always been about how do you transform the data into a story. And any launch or pitch is fundamentally a story, it's got to have a beginning, middle, or end. It has to have social proof, it's got to have a clear thesis of pros and cons, it's got to think about the broader context of the business. And so that's how I think we've always tried to approach it, sometimes perhaps more successfully than less. But I think that the key in any context of using data is about remembering that you're building a story and that's how the entire thing has to thread through.

Alexis: Yes. Hell, yes.

Brianne: So a little bit of devil's advocate here. So because this is a brand studio, how do you find the balance of bringing in research and data backed insights and be very quantitative, while also inspiring the team to be really creative and to give some of the celebrities and talent that you're working with a little bit more creative control?

Dan Robbins: It's a great question. And I think what we're most excited about with the brand studio is that we are actually bringing the data and the creativity together. And our whole thesis here was that we could actually create content and shows based on what we know consumers are interested in and like. And so we actually just launched a new program out of the brand studio called The Show Next Door. And it's brought to you in partnership with Maker's Mark, and it's hosted by Randall park who is most recently in Disney + WandaVision. And the whole idea here was a short talks show series that has the feeling of having a drink or a cocktail with friends over in your living room. But to your question about the data, the key concept for this actually came from an insight we see, which is that comedy was a really natural entry point over the last year. And on The Roku Channel, which is where this will be distributed, we saw a 798% increase in streaming hours for comedy year over year. And I can't speak for all of the channels that are on our platform and each of them have their own process for how they think about their scheduling, their windowing, their distribution. But what I think is more exciting than ever before is that it's not a either or, but a both and. So you can use the data, you can use creativity and ideas and you can pull them together and then take the balance of that and figure out what's most exciting. I actually think what's an interesting twist on this is that it's not just the content owners who are then thinking about creativity and data together, the marketers can do this too. And small and medium- sized companies and D2C companies and performance driven advertisers have those same tools now for the TV screen.

Alexis: I think what you just mentioned was a diversity of different types of advertisers coming on the platform. And I saw that first time advertisers made up 42% of Roku's upfront commitments this year. Is that something that you targeted intentionally to bring those first time advertisers onto a streaming platform? Or was that something that you saw develop organically?

Dan Robbins: Yeah. And so the way traditional TV has historically been bought and sold is a good amount of the$ 70 billion or so that are spent nationally in the US on TV advertising are sold in the upfront. And the idea is that all of the content owners are going to show what their schedule looks like for the next season. And all of the advertisers can pool their money and buy into ad space for the year ahead. And this has been something that has existed for decades in traditional TV.

Alexis: You have to have a lot of money as an advertiser to participate in that as a result.

Dan Robbins: Exactly. And so historically, not only in the upfront, but in traditional TV more broadly, it's been the largest brands of Fortune 500 companies that have had the media spend and the budgets to really lean into traditional TV. What we actually think is most exciting about the opportunity in TV streaming is that it democratizes access. And what we saw our last earnings we shared that actually advertisers or marketers outside of the ad age 200, which are the 200 largest advertisers, are actually growing faster on our platform than those top 200. Which basically just signals that there's this tremendous opportunity for medium and smaller advertisers who say," Okay. I've got video ads, I want to drive performance. I know I need to be able to measure results." And there's a much easier end point into TV streaming because it's digital- like than traditional TV.

Brianne: Alexis, this is starting to sound a lot like the work that you were doing at Patreon around direct to creator partnerships. What do you think about this model?

Alexis: My thought is that we're going to see a lot more diverse branded content, both in tone, in style, in genre. I think we'll see things that are more self- aware, self- referential. Often when you have a smaller budget, it can hold you back, but it can also make you intensely scrappy and creative. And so I'm actually pretty excited about what'll come out of that from an advertising perspective. Brianne, you mentioned something about my work with Patreon, which of course, is a platform that lets artists and creators build their own membership businesses. And something that I'm curious about Dan, is in the way that Roku is opening up opportunities for emerging brands to participate in the advertising streaming opportunities. Will it also be opening up opportunities for more emerging creators to create original content on the platform as well?

Dan Robbins: Yeah. It's a great question. And we don't have anything to share in specific like Patreon where it's a creator incubator. But one thing that's exciting about Roku is that it is a platform with thousands and thousands of channels. And so we've got some of the largest media companies right down to local TV networks and creators. And so the diversity of content, I think, is something that's super exciting. And it does give you the ability to explore and change the form factor in a way that you couldn't historically.

Brianne: Dan, that's such an interesting point because Roku has the distribution, which is awesome. So whether it's partnering with emerging brands or something I'd love to get your thoughts on is more celebrity driven content. So I know Quibi raised$ 2 billion from the biggest names in Hollywood. Long story short, shut down after six months. I know that Roku has acquired some of Quibi's content. How did that fold into this broader strategy alongside the brand studio?

Dan Robbins: And so we talked about this a bit with Roku Originals, but to give a bit more context. We acquired Quibi's library and launched Roku Originals as a way to bring really Emmy quality TV programming to the larger screen in the home on the largest streaming platform. And the whole idea was there's this awesome TV content, but if you are able to give it, one, without any signup and, two, entirely for free supported by brands, there would be a really a large appetite for it.

Alexis: And so are you positioning that as an alternative to Quibi where it was both on the smallest screen possible and protected behind a paid offering?

Dan Robbins: Yeah. So it's a bit of a different way to showcase that content. It lives in The Roku Channel, on the TV screen, free ad supported, no subscription. And we've seen tremendous success so far. Actually, this week Roku Originals were nominated for eight Emmy Awards, which is super exciting for us.

Alexis: Oh my God. Are those your first Emmy nominations as a platform?

Dan Robbins: For content and programming. There's the technical Emmys, which are a little bit separate, but yeah, for a Primetime Emmy Award this is our first time. And so we're super-

Alexis: Wow. Congrats.

Brianne: Wow. Congrats.

Dan Robbins: Yeah. We're super excited about it.

Brianne: Dan, can you take us back to the initial meeting that you had with the team? Because I'm sure this was a fairly controversial insight and I'd love to understand what kind of concerns did the team have?

Dan Robbins: What made us confident in Roku Originals was the growth of The Roku Channel and the growth of free ad supported TV and the interest from marketers in many ways to take traditional TV and bring it into TV streaming. And we've started to see that shift really accelerate. What also gave us a lot of confidence in Roku Originals and has been validated was the power of really good talent and really good writing in a really good distribution platform. And then just making sure that the economic model made sense that the investment matched where the business was going and all of those so far have really played out well for us.

Brianne: That's awesome. Yeah. That makes sense. I mean, with this sort of business model, I can imagine you have a lot of brands that are coming inbound that would love to create original content with you. How do you think about that balance between the large Fortune 500s that are coming inbound versus maybe their... Does your creative team have a wishlist of brands they'd love to work with?

Dan Robbins: Sometimes it's the largest brands. It's like Walmart coming in and being a sponsor in Roku Recommends, which we mentioned earlier. Sometimes though it's also direct to consumers brands. A good example of this is Headspace, which was running their video ads on the Roku platform. They were using OneView, again, which is a ad buying platform built for TV streaming to optimize their campaign. They found a 50% lift in conversions as a result of doing so, which getting folks basically to convert to go download the Headspace app or visit the Headspace website and sign up for a free trial. And then build out a whole retargeting campaign based on that and start to optimize their creative as well. And so I bring that up just to say that it can be the large brands, the D2C brands, some of the small brands. And so we just put an open call out to the folks who have great ideas and that's what gets us energized.

Alexis: That's awesome. And should those people with those ideas, they should just email you directly?

Dan Robbins: Yes. Or they can go to advertising. roku. com.

Alexis: That's awesome. Actually, I have one last question, which is where do you keep your Roku remote so that you don't lose it?

Dan Robbins: So this is a pro tip perhaps, but the Roku app, which you can download on your phone has a remote function. And so you can actually use your phone as your remote if you'd like.

Alexis: Huge. That's massive. Honestly, what a bombshell that we saved right for the end of the interview. Thank you so much, Dan, for telling us all of these interesting insights about your decisions and Roku and what's next for advertising. We will see you soon.

Dan Robbins: Thank you for having me.

Alexis: Of course. Hey Brianne, are you ready to do that thing we practiced?

Brianne: Oh my gosh. Is it time? I'm ready.

Alexis: Okay. Three, two, one. Don't forget to subscribe and leave us a review.

Brianne: Don't forget to subscribe and leave us a review. Pretty good.

Alexis: Today's episode was written and produced by Matthew Brown. Production support comes from Lauren Shield. Our engineer is William Lowe. With research from Corey Broccolini. And special thanks to Kyle Denhoff and Lisa Toner.

Brianne: We have some amazing guests coming up this season that you won't want to miss.

Alexis: See you next time.