TIVP029: ROKU (ROKU): FORGOTTEN STREAMING GIANT

W/ SHAWN O’MALLEY & DANIEL MAHNCKE

20 July 2025

Shawn O’Malley and Daniel Mahnke break down Roku (ticker: ROKU), an aggregator of digital content in the world of TV streaming, with a footprint in nearly 90 million households. Roku is the gateway to streaming, and its devices have famously turned any TV into a Smart TV, but now Roku does much more than that.

In this episode, you’ll learn why the market has soured on Roku, how much its honeypot of first-party data could be worth, how Roku makes money for driving subscriptions to services like Disney+, how Roku is monetizing its uniquely positioned business, what has powered The Roku Channel’s surge toward ad-supported streaming dominance, plus so much more!

Prefer to watch? Click ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to watch this episode on YouTube.

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IN THIS EPISODE, YOU’LL LEARN:

  • How Roku is a unique combination of being like a streaming service, device manufacturer, and digital advertising exchange.
  • Why Roku’s financials look so poor and why the market has soured on Roku post-pandemic.
  • How Roku has been able to sustain its massive market share over competitors like Amazon and Google in connected streaming.
  • Why Roku’s intrinsic value is so volatile given small changes in assumptions about its future.
  • What makes Roku’s founder/CEO so special.
  • Why Roku may be sitting on a gold mine of digital real estate.
  • The biggest competitive threats facing Roku.
  • Whether Shawn and Daniel add Roku to their Intrinsic Value Portfolio.
  • And much, much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

 

[00:00:00] Shawn O’Malley: Roku is a totally misunderstood company. The market sees it as this unprofitable streaming hardware company that has no enduring advantages protecting its market share. But that’s not what Roku is. Roku is an aggregator, a service with over a hundred million people here in the us and it acts as the bridge between turning on their TV and then deciding what they’re going to watch, whether they’re going to open Netflix, Disney, or HBO.

[00:00:26] Daniel Mahncke: So it doesn’t really compete with other streaming platforms. It’s more of a paid promoter for streaming services that among other things, make money when people sign up for Netflix or Disney through its service.

[00:00:39] Shawn O’Malley: Right. And, and, and things look worse for them because they sell all their hardware at a loss like these streaming sticks and smart TVs.

[00:00:46] Shawn O’Malley: But they do that intentionally to try and achieve as wide of a scale as possible, which they’ll later monetize with advertising. They are still very much building their earnings power.

[00:01:02] Intro: You are listening to The Intrinsic Value Podcast by The Investor’s Podcast Network. Since 2014, with over 180 million downloads, we’ve learned directly from the world’s best investors. Now we are applying those lessons to analyze businesses and investment opportunities every week, helping you uncover intrinsic value. And now here are your hosts, Shawn O’Malley and Daniel Manhcke.

[00:01:34] Daniel Mahncke: Today’s pitch is a complicated one from what I can tell. Shawn, you’ll be making the case for a company that can be found in tens of millions of households. Despite that right reach, it hasn’t found a way to be long-term profitable. They haven’t fully monetized what is a very promising business on paper.

[00:01:51] Daniel Mahncke: And that company, Roku is a streaming diet in its own way. It’s a bit differently than Netflix, though. Roku is almost the gateway to digital TV content as opposed to being a huge digital content creator itself. And when its products first came out, was this really exciting shift because you could easily turn basically any TV into a smart TV.

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