Roku reportedly has conducted focus group studies exploring the possibility of manufacturing and marketing Roku TVs under its own brand.

According to a Business Insider story this week citing only an individual “familiar” with the activity, Roku has allegedly started conducting focus groups this month in which participants were shown different models of smart TVs, with various feature sets, names, sizes and price points.

Roku was reported to have been telling participants that it was only studying the possibility of “going it alone” as a TV manufacturer, and was not looking to simply add the Roku TV name to another TV manufacturer’s brand or product line.

Roku CEO Anthony Wood and CFO Steven Louden declined to comment on the Roku TV manufacturing rumors during the release of Roku’s Q4-2021 financial results Thursday.

However, company executives acknowledged on-going challenges from the global supply chain on Roku’s hardware-related businesses. Hardships shipping TVs and Roku devices contributed to a loss of nearly $50 million in the period, according to quarterly report.

In the period, Roku said it reached 60.1 million active users as total revenue for the company hit $865.3 million, up 33.2% year over year. The company said the supply chain disruptions contributed to a somewhat slower growth rate of active users. The number of streaming hours by Roku users increased from the previous quarter, up 1.5 billion hours to 19.5 billion by the end of the period.

During the first quarter of 2022, Roku forecasts its total revenue will reach $720 million.

The devices segment only accounts for about 14% of Roku’s revenue, with media and advertising playing a much bigger part in overall profitability, but the hardware was the foundation on which those revenue streams were built.

Roku has made major headway in building the smart TV aspect of its business through tie-ups with TV brands including TCL, Hisense, Insignia and others. Roku has focused primarily on the mainstream end of the TV business where consumers are interested primarily in price and value above the latest and greatest picture and sound technologies.

Roku’s value proposition long has been anchored in a very easy to use presentation of a huge library of streaming media apps and services. Roku takes a piece of some of the revenue many of those apps generate on a monthly basis as well as advertising revenue generated by its stable of free movies, programs and original content offered through The Roku Channel section of the Roku Smart TV OS.

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Recent studies have demonstrated that fully integrated smart TVs continue to grow in importance relative to streaming dongles and ancillary devices for accessing over-the-top content, and streaming has been growing steadily amid the cord-cutting trend of the past several years.

The Roku TV platform was instrumental in helping build TCL into the third-ranked TV brand in the United States in recent quarters. Its Roku TVs are similarly popular in Canada and Mexico, and expanding under the Roku TV subbrand in parts of Europe, The U.K. and South America as well.

However, Roku has been seeing intensified competition from rivals including Amazon’s Fire TV and Google’s Android TV/Google TV platforms. Stating in 2020, TCL began stepping up its offering of TVs based on the Android TV and Google TV platforms within its mix of sets for North America, and Hisense recently announced only lines of TVs based on Google TV and Android TV for North America at the recent CES 2022.

In January, TCL disclosed that it sold 10 million TVs a year globally powered by the Google/Android TV OS.

Adding some credibility to the self-branded Roku TV story is the fact that one of its biggest rivals did the same thing last year — Amazon introduced its first two lines of Amazon-branded smart TVs based on its Fire TV OS, which is itself based on the Android TV OS.

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By Greg Tarr

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