Roku and China-based television manufacturer TCL continue to expand the footprint of the Roku TV platform to new countries and regions around the world, including Europe and South America, Roku announced Wednesday.

In a statement from Roku released as its second quarter financial advisory hit investor inboxes, the company said TCL is bringing Roku Smart TVs to Europe and South America next year through a multi-year, multi-country partnership that “builds off the success that was started in 2014 with the introduction of the first TCL Roku TV model.”

“By combining TCL’s global scale and manufacturing capabilities with the powerful and cost-efficient Roku TV platform, the companies deliver a premium experience that is affordable for a wide range of consumers,” the statement said. “TCL Roku TV models have repeatedly won Editor’s Choice awards from top consumer media outlets, with new features added each year to deliver a better entertainment experience. TCL is also a member of Roku TV Ready, a newly developed partnership program that enables consumer electronics companies to work seamlessly with Roku TV for an incredible home entertainment experience.”

“Roku’s incredible brand recognition helped open the door for TCL with retailers and consumers. We look forward to rolling out more TV models with TCL in North America and seeing strong success in Europe and South America,” said Mustafa Ozgen, Senior Vice President and General Manager of Roku’s Account Acquisition Business.

Together, the companies have established one of the largest and fastest growing smart TV platforms in North America, including Canada where some one in four televisions sold are Roku TVs. TCL Roku TVs rank as high as No. 2 in market share for smart TVs in North America, but the televisions have been mostly absent in other parts of the world.

Last year, another Chinese TV maker with a popular line of Roku TVs in North America, Hisense, announced that it was bringing the first Roku TVs to the United Kingdom. The TCL/Roku announcement is th next leg in the what is apparently a plan for more global availability of smart TVs running an embedded version of the popularly simple-to-use and app-rich platform.

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Meanwhile, in its just released second quarter financial statement to investors, Roku said it is also continuing to broaden the Roku TV footprint in Mexico “with a new partnership with Sharp, as well as the recent successful launches of Roku TV models from JVC and Philips. AOC Roku TV models are off to a good start in Brazil. Our successful partnership with TCL is expanding beyond North America to include additional strategic international markets.

TCL and Roku will go up against a growing base of TV brands launching the latest generation of televisions incorporating Amazon’s Fire TV operating system. Where Roku, predominantly under the wing of TCL, has developed a market for Roku TVs in North America, Amazon has been steadily lining up partnerships in other regions of the world for integrated Fire TVs, with brands like Grundig, Toshiba, JVC and Onida.

In North America Fire TVs represent a comparatively small share of the market, sometimes leveraging exclusive models and brands for big box CE retailer Best Buy. Best Buy also sells lines of televisions running the Roku OS from brands including JVC, Westinghouse, Sharp, Hisense, TCL and others, as well exclusive Android TVs from TCL.

Despite the expansion and positive revenue results, Roku’s second quarter financial statement to investors showed a deepened income loss from operations of $42.2 million, as the company continues to invest in future products and services. The loss compared with a $10.4 million loss for the same period a year ago, and came as Roku reported a string of positive results including the fact that its revenue grew 42% to $356.1 million, largely from advertising dollars for its connected TV services, like The Roku Channel. Average revenue per subscriber rose 18% to $24.92.

Against the pandemic, Roku said its active accounts grew 41% from a year ago to 43 million, the biggest net increase outside of a fourth quarter holiday period, and streaming hours grew 65% to 14.6 billion.

The company also reported increases in revenue in both its platform business and its player business. Platform revenues were up 46% to $244.8 million and player revenue was up 35% to $111.3 million.

“Demand for our players increased following the start of shelter-at-home orders in mid-March. Despite the pandemic’s adverse impact on global supply chains, we have largely managed to keep our products in stock, albeit with a greater use of air freight than originally planned. Due to strong demand and tight inventory levels of certain products, we ran fewer promotions than we normally would which benefited player margins,” the company’s advisory statement said.

As for advertising revenue, Roku said monetized video impressions grew 50% year over year. First time ad clients were up 40% in the quarter from a year ago and in the first half of 2020, Roku retained 92% of advertising clients that spent $1 million or more in the first half of 2019.

Direct response advertisers using Roku’s new performance advertising business grew 346%, with many of those advertisers cutting back on social media spending.

Roku also said that some programmers increased marketing investments aimed at Roku users. This included live OTT streaming service fuboTV, which has positioned itself as an alternative to cable for cord cutters into sports. From June to July, new monthly sign ups more than doubled for fuboTV, with 50% attributable to promotional spending on the Roku platform.

The company said it expects overall revenue will grow “substantially” in the second half and for the full-year 2020, although not as high as anticipated prior to the pandemic.

“In Q2, Roku delivered another quarter of strong results and increased scale rapidly. We are grateful for the productivity of our talented employees. Our investments in R&D are differentiating our platform while strengthening our advantages and helping consumers, content owners, TV OEMs and advertisers benefit from the transition to streaming. We plan to continue to invest in streaming platform innovation and look forward to connecting more of the TV ecosystem with Roku,” Anthony Wood, Roku founder and CEO, said in a letter to investors.

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By Greg Tarr

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