Roku, Inc. (NASDAQ:ROKU) Q2 2019 Earnings Conference Call Transcript
Aug 07, 2019 • 05:00 pm ET
[Operator Instructions] Our first question comes from the line of Thomas Forte with D.A. Davidson. Your line is now open.
Great. So for my first question I want to talk about for the OTT advertising market I wanted to know if you thought if the increased focus on privacy including at the regulatory level was going to hit all have a negative impact on advertising spending for OTT?
Hey, Tom. Scott Rosenberg here. Great question. On balance, we of course take privacy, very seriously as a company, but we have a first-party direct relationship with our consumers and it puts us in a unique position as a platform to both explain to consumers, how the data is used and to control it. And I'll just contrast that against third-party entities intermediaries who don't have that direct consumer relationship and who are going to be more challenge to articulate and justify the use of data. So on balance, of course, we take it very seriously, but feel that as a platform with a first-party consumer relationship we're uniquely positioned.
Great. And then for my follow-up question I wanted you to give -- I guess a sense kind of if you thought this was maybe a three year potential, five year potential, 10 year potential. So as a long-time follower of the industry for an extended period of time there was a large disconnect between mobile usage and mobile digital ad spend as a percent of total spend you see it today and over the top. So when do you think you'll see more parity between usage and percent of advertising spend for OTT? Thanks.
Good question. I think that, we're still in the early stages of the secular shift the consumer TV habit moving to OTT and that move is very fast. You can see it in the growth of streaming hours on our platform. So I do think it will take more than three years to play out with that said, we're making great progress as shown by our revenue growth, our ARPU growth, and it really owes to progress in our ad products, measurement, proof points that they work attracting TV ad dollars, as well as progress on the content distribution side of our business through things like Roku Pay. At the end of the day for us it really is going to come down to proving to advertisers and content providers that Roku delivers incremental substantial reach over traditional linear TV, and we are more effective at both the ad products we deliver and at helping content companies acquire subscribers.
Thank you. Thanks for taking my questions.
Our next question comes from Mark Mahaney with RBC Capital Markets. Your line is now open.
Great, thank you. This is Shraddha for Mark, two questions please. The first one is on content distribution. Steve, could you please elaborate on the comment of increase in estimated value of content distribution agreements, based on the improved visibility and performance trends, which led to