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Gavin Baker
@bakergavin
, 9 tweets, 2 min read Read on Twitter
1) Continuing Sunday’s review of quarters (mixed in with some gaming), $ROKU also had a fantastic quarter. Streaming accounts up 40% to 27m, hours streamed up 62% to 24b and ARPU only up 30% to $18. ARPU growing at half the rate of hours streamed highlights continued opp
2) 25% share of smart TVs, #1 share in players and #1 share of overall TV operating systems. 1 in 5 TV households on $ROKU, equivalent to the #2 pay TV company and over 10% of overall TV viewing is now OTT.
3) Roku Channel is brilliant and there is a real need/opportunity for a free, ad supported $NFLX competitor. I see the future of premium video (as opposed to user generated) as a race between between $NFLX, $DIS, $ROKU and $AMZN with $NFLX obviously way ahead.
4) Monetized ad inventory doubled last year and should double again across the $ROKU platform. $ROKU’s $18 ARPU is an annual number and compares to $CMCSA video ARPU at $1000ish (unfair comparison but still interesting).
5) Lots of ARPU upside. Simple math: $70b TV ad market, 10% of overall TV viewing is OTT today (curious if they excluded $NFLX). OTT ad spend should be $3b or $7b depending on whether $NFLX was excluded. $ROKU's "fair" share of this is over 25%. All TV will eventually be OTT.
6) $ROKU's ad revenue today should be $750m -$1.75b ($NFLX exclusion dependent) instead of 2018's $292m (70% of platform revenue). This gap will close - monetization always follows engagement - and the "opportunity"/TAM should continue growing rapidly with the shift to OTT.
7) IMHO, EV/GP is the best valuation metric for $ROKU and the comp group is $NFLX and $SPOT. $ROKU is at 15x EV/GP for 40% growth in gross profit, $NFLX is at 21x for 29% growth and $SPOT is at 14x for 20% growth.
8) It is a mistake to ignore companies like $W and $ROKU because of $AMZN risk. Smaller, niche focused competitors can successfully compete with much larger companies. $ROKU is outcompeting $GOOGL, $AMZN and $AAPL in a highly strategic area. Focus is powerful.
9) Kinda funny that $DIS paid $4bish for BAMtech in late 2017 instead of buying $ROKU.
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More from @bakergavin see all

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Gavin Baker
@bakergavin
1) $EA. Some updates on Apex Legends (awesome) and Anthem (disastrous). Apex Legends has consistently been a top 3 game on Twitch in the week after their tournament, continuing a superb launch. Here it is last night at 7 PM:
2) Equally impressive is the fact that Apex Legends has 571k subs on Reddit after only 3 weeks which compares to Fortnite at 1m, CS:GO at 804k, Rainbow Six at 587k and Black Ops 4 at 297k. Reddit/Youtube are where players learn about the meta so community size says a lot.
3) Intersection of Twitch, Reddit and various Youtube metrics (37 NPS score for Apex Legends trailer vs. 16 for BlackOps4) is the best way to assess a game in the absence of sales data. Videogame co’s carefully monitor all of these metrics – for their own games and competitors.
Read 15 tweets
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Gavin Baker
@bakergavin
1) Great quarter from $W. Repeat order %, AOVs and frequency all growing significantly YoY with nice gross margin leverage – all of this despite the fact that mix is shifting to international which is depressing all of the above metrics per mgmt. commentary.
2) All of the above leads to the cohort slide, which is particularly impressive.
3) Continue to find it strange that various commentators artificially inflate CAC by attributing all advertising spend to new customer acquisition despite the fact that repeat orders are more than 2/3 of all orders.
Read 12 tweets
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Gavin Baker
@bakergavin
1) Best article yet on AR. More convinced than ever that $GOOGL and $AAPL are going to dominate AR. And slowly coming to believe that both AR/VR are more of a risk than opportunity for $FB. Interesting to reflect on all this in the context of Zuckerberg’s email.
2) In AR, I believe the platform is likely more valuable than the apps. In VR, the apps will be more valuable and may become the platform. And don’t see $FB having a natural advantage in VR apps.
3) Re: AR: “At first the Mirrorworld will appear to us as a high resolution stratum of information overlaying the real world. We will interact with it, manipulate it and experience it like we do the real world.” The new Google Maps experience.
Read 14 tweets

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