Founder, Chairman, President & Chief Executive Officer, Roku, Inc.
Good TV: Roku’s CEO on Access, Affordability, and the Future of TV | Fast Company
Featuring Anthony Wood, Founder, Chairman, and CEO, Roku
Moderated by Kc Ifeanyi, Executive Director of Editorial Programming, Fast Company
As subscription prices for streaming services continue to climb, Anthony Wood, founder and CEO of Roku, is focused on a different promise: access. Through affordable devices, free streaming options like the Roku Channel, and, more recently, their budget-friendly streaming service Howdy, the company is doubling down on giving audiences more choice—not higher bills. In this one-on-one conversation, Wood unpacks how his company's mission stacks up against th...
About Anthony Wood
Anthony Wood, founder and CEO of Roku, reflected on the evolution of streaming in a September 2022 interview, noting that many media company executives underestimated the shift away from cable and satellite. Wood stated, "The internet has disrupted every industry and it's going to disrupt video as well," adding that he viewed such underestimation as a competitive advantage for Roku. He also discussed Roku's business model, explaining that while the company does not bill with a monthly subscription like a traditional cable operator, it has a billing platform and influences subscriber sign-ups through its purpose-built TV platform. The interview also highlighted Wood's earlier career, including his invention of the DVR through ReplayTV and the 2008 launch of the Roku streaming box.
Transcript (39 segments)
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Casey Finney0:12
Good afternoon everyone. My name is Casey Finney, executive director of editorial programming at Fast Company. I'm excited to talk to Anthony Wood, founder and CEO of Roku. Let's start with 2008 when the Roku box launched with Netflix, allowing streaming to TV. What was the home entertainment landscape then, and why was the Roku box revolutionary?
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Anthony Wood1:02
Netflix was doing DVDs by mail but had always planned streaming. YouTube might have started around then, but it wasn't like today. The first streaming service from Netflix was so bad they gave it away free with DVD plans. The industry didn't want to license TV shows or DVDs. We made the first streaming player for Netflix, called the Netflix Player, and it did well, selling 100,000 units the first year. We kept updating software, adding a TV app store, other streaming services, and universal search, and it took off.
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Casey Finney3:02
And you know, the Roku box was by no means your first major invention, because I'd be remiss if I didn't mention that Anthony created DVR. So, if you think about the DVR, if you think about the Roku box, what's behind your ability to see just around the corner to what's next?
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Anthony Wood4:03
Well, that's—I don't know, but it just comes naturally to you. My background is engineering, so I've always been interested in tech. One thing that makes me good at that is understanding what can actually be made. People suggest inventions, but I focus on what's possible with technology. I also have a good sense of what people want to pay for, which I learned from starting companies early and failing before success.
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Casey Finney5:12
And you know, you mentioned the leap from 100,000 units to 35 million, and Roku becoming massive. Where do you see Roku sitting in the current ecosystem of streaming home entertainment? You've carved out a significant lane, so how do you view Roku in this overall landscape?
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Anthony Wood5:36
When people think of Roku, they think of streaming players or Roku TVs, but if you look at our revenue, roughly $5 billion in platform revenue and $0.5 billion in device revenue. Devices are a small part, and we lose money on them—they're sold below cost to build distribution. We're a distribution platform for streaming services, distributing 40% of all streaming, and monetize through subscriptions, billing, and advertising.
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Casey Finney6:52
And you know, I'm curious because, as I mentioned earlier, you started your first business in high school. You've always had this entrepreneurial and innovative spirit. How do you maintain a culture of innovation within Roku while operating at this massive scale? Because sometimes the bigger you get, the harder it can be to be agile.
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Anthony Wood7:17
That's a hard problem. Innovations have to generate significant revenue now; things that used to be exciting for $100 million don't cut it. We need to grow 20% plus a year, which on $5 billion is $1 billion, so we need billion-dollar ideas. It's easier to grow existing businesses than come up with new billion-dollar ideas. There's financial pressure as a public company; we have to be profitable and grow earnings. Roku has $2 billion in the bank but can't spend it all at once without showing a loss. Part of the solution is the base culture: empowering people, low politics, hiring great teams. We're always looking at growth opportunities, like Roku Ads Manager for small businesses and our new streaming service Howdy.
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Casey Finney10:24
Since you brought it up, let's talk about Howdy. It's a new ad-free streaming app. I want to discuss the name, especially since we're in a room full of Aggies, and how you see Howdy fitting into the Roku ecosystem.
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Anthony Wood11:12
I didn't come up with the name; our marketing team did. They might have been playing to my interests as an Aggie. Howdy is a good name for a consumer product—it's friendly, approachable, and memorable. Downsides: not easily trademarkable and people think of Westerns, but it's not a Western service. It's a good name overall.
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Casey Finney12:23
And you launched Howdy as a service to complement, not compete with giants like Netflix. Why is a cheaper complement the right strategic move for Roku right now?
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Anthony Wood12:35
Roku's business is roughly $5 billion, half advertising, half subscriptions. We have the Roku Channel, which is 6.4% of all streaming, the number two app on our platform. We have Friendly, a low-cost virtual MVPD, and Howdy, launched less than a year ago. The streaming market has evolved; services like Netflix used to be low-cost, ad-free, but now raise prices and add ads. That original part of the market is gone except for Howdy. It's library content, not originals or sports, but that's a large part of viewing. Howdy targets low-cost, ad-free, and will keep adding content. People subscribe to multiple services, so Howdy complements Netflix well.
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Casey Finney15:06
Why do you think the sector of low-cost ad-free was neglected? Why are you the one to fill that hole?
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Anthony Wood15:15
Large companies like Netflix have to keep growing for their stock price, so they raise prices and spend on expensive productions, abandoning the low-cost, ad-free market. For Roku, it's all new revenue, so it's upside. In five or ten years, with AI, Howdy could have AI originals and become a mainstream service.
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Casey Finney16:24
Speaking of Howdy, let's make an announcement to these fine folks.
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Anthony Wood16:33
We're going to give free Howdy subscriptions to all Texas A&M freshmen for a year.
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Casey Finney16:48
And we'll have Howdy devices in the back. Find me or our staff to get set up. Also, we're giving everyone a streaming player.
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Anthony Wood17:01
Yeah, a streaming player. Save fifteen bucks.
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Casey Finney17:16
The benevolence is amazing. Thank you, Anthony. What advice would you give to current A&M students who want to build successful companies?
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Anthony Wood17:37
Persistence is key; very rare that the first thing works. For every Mark Zuckerberg, there are hundreds of entrepreneurs who tried multiple times. Build something people want; it's hard to get investors as a college student, so build something that works or start selling it to attract investors.
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Casey Finney18:44
You started your first business in high school and another at A&M. What's the root of your persistence and ability to see around the corner?
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Anthony Wood19:06
Early on, it was wanting money from a lower-middle-class background. But I also like to make things. In high school and college, I wrote software and submitted it to publishing houses, but when rejected, I decided to sell it myself. That was the main reason for my first company.
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Casey Finney20:02
Anthony mentioned he'd take audience questions. Start thinking about them. Today, we're sharing the stage with Texas A&M at The Fast Company Grill, focusing on doing good. Let's talk about your Wooden Next Foundation, which makes grants and investments in scientific research, mental health, homelessness. Tell us about Next and why you chose these causes.
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Anthony Wood20:46
We have a large foundation, probably top ten in Texas or the country. I don't think people have an obligation to give back, especially since I pay a lot of taxes. But personally, I feel an obligation to use money usefully. It's a problem deciding what to do with a lot of money. I want to fund things that help. For example, I hate jet lag, so I fund two labs trying to cure it, including one at A&M. We also do nature conservation and science research.
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Casey Finney25:04
Let's take questions. Raise your hand for Anthony.
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Audience Member25:16
You mentioned 40% of streaming goes through Roku, and 20% of all TV. What do you envision for the OTA market and how Roku fits into it?
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Anthony Wood25:41
OTA, over-the-air antennas, don't work well in most places. The TV business isn't excited about it; they prefer subscriptions. Even in the UK, where it works, people are moving to streaming for convenience and better quality. The spectrum is more valuable for data, so it will eventually be repurposed, but it takes time.
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Casey Finney27:16
Another question.
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Audience Member27:19
Formerly happy ReplayTV user, I miss the 32-second skip button. You have YouTubers on Roku Channel; would you bring them to Howdy? How do you see creator-led media on Roku?
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Anthony Wood27:40
We think about that a lot. AI will open a new generation of creators, allowing anyone to create shows. We're interested in becoming a leading platform but haven't figured it out yet. It's an open question whether YouTube will dominate long-form content.
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Casey Finney28:36
One more question.
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Audience Member28:41
You started your first company very young. When you made your first sale, did you jump up and down or were you 'That's cool'?
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Anthony Wood28:58
I have a personality defect: I just want to move on to the next thing. So, 'That's great, we sold one,' then 'We sold ten,' and so on.
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Casey Finney29:16
Another question.
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Salonika29:27
Hi, Salonika, founder of Repurpose. Yesterday, Ben Cohen talked about capitalism as the best tool for societal change and the obligation that comes with it. What do you think is the obligation of capitalism? What role do you see for capitalism today?
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Anthony Wood29:53
Capitalism and free markets improve lives efficiently. It's the government's job to set ground rules; business is ruthless within those rules. Capitalism allocates resources efficiently, but nonprofits lack that competition, becoming inefficient. I look for companies that can solve problems more effectively. There's also fraud in nonprofits; we found one faking pictures for creek cleanup.
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Casey Finney32:18
We're over time. Anthony, anything to leave us with on this day of good?
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Anthony Wood32:31
Thanks for coming. If you want a new streaming subscription, Howdy is great—and you're going to get free ones.
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Casey Finney32:43
I love it, Anthony. Thank you so much. Give it up for Anthony.