Roku, which has spent the past two decades building an advertising business, is rolling out an ad-free subscription streaming outlet aimed at price-conscious consumers.
Howdy, as the new service is known, will cost just $2.99 a month. At launch, it will offer a range of library films and series from Warner Bros. Discovery, Lionsgate and other suppliers. The goal is to provide comfort fare but without commercial interruption and without busting budgets. As other SVODs have aggressively stepped up prices, Roku is insisting that Howdy’s $2.99 is not a teaser or introductory price but is intended to stay in place for some time.
In an interview with Deadline, Roku founder and CEO Anthony Wood called the service “a response to the reality that many consumers are interested in a service that is ad-free and low-cost. A large part of subscription viewing is library content. We feel Howdy is in an excellent position to win over those viewers who want to unwind with some of their favorite movies and TV shows, uninterrupted. ”
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The 10,000 hours of film and TV programming available at launch includes titles like Elvis, Mad Max: Fury Road, the Back to the Future franchise, Weeds and Party Down. Roku Originals will also be included in the offering.
A key driver of Howdy will be the organic reach of Roku, which earlier this year hit 90 million households, though other non-Roku distribution platforms will soon be activated. The Roku Channel, a top streaming destination as measured by Nielsen, extends the footprint of the company to 125 million people a day.
The launch follows another move by Roku into subscriptions earlier this year with the acquisition of streaming pay bundle Frdnly.
According to insiders at Roku, Wood and his team had been mulling a subscription entry well before inflation kicked in across the market. Yet the difference between three dollars and the rest of the market is now stark. Apple TV+ doubled in price just five years into its existence, and all major outlets have phased in steep hikes, with Peacock the latest at a $3-a-month add-on introduced last month ahead of its NBA debut. YouTube TV also hit subscribers with two increases in less than two years, with its basic pay bundle plan now at $82.99, up more than 26% over its level at the start of 2023.
On Roku’s second-quarter earnings call last week, Wood was asked about leveraging Roku’s prominent position in streaming to drive subscription revenue. While Howdy had not yet been announced, Wood called attention to a content recommendation row at the top of Roku’s home screen, which includes subscription options. “There’s lots of different locations across our UI where we can recommend content, including subscription content,” he said. “And then, bundling is a big factor in the industry. And one of the things we’re focused on is improving our capabilities to do bundling and then putting together bundles, creating bundles of bundles include technical capabilities, product capabilities, but also deals and commercial relationships. So, we’re working on all of that and that’s improving. Certainly Frndly, we’re definitely looking at doing different kinds of bundling and adding more content, creating more packages around Frndly.”
Because of those resources, Roku is “the perfect partner to launch a more accessible complement to the higher-priced SVODs,” said Jim Packer, President of Worldwide Television Distribution, Lionsgate. “This service has the ability to scale quickly while providing us with a new way to monetize our content, and we’re proud to be part of this new streaming experience.”