Roku adds 23 more Quibi shows as it pursues original content strategy

Roku said on Monday he would add 23 more Quibi shows to his collection of “originals” as he tries to build on his ad-supported content strategy.

The shows include more of the content he purchased from the now-defunct streaming service, including four that had never been aired before. Roku said in January that he had acquired the rights to more than 75 shows from Quibi. He debuted on 30 of those shows in May.

The new shows include ten-part docuseries “What Happens in Hollywood” and “Eye Candy,” a competition series hosted by Josh Groban. The shows will air from August 13 in the United States, Canada and the United Kingdom

The company licenses content to other media companies and has also purchased shows, including “This Old House,” which it acquired earlier this year, for The Roku Channel. It generates income by selling advertisements against programming.

Needham analysts said in a note last week that Roku’s content goal is to maintain an ad-supported video-on-demand business model without negatively impacting content creation gross margins.

The Roku channel “continues to expand its reach by developing niches,” analysts wrote. “The total number of hours of streaming doubled to [The Roku Channel] in 2Q21, driven by its flywheel of creating new Roku originals, which leads to more hours of viewing, which attracts new advertisers, which results in higher ad spins, which Roku invests in new original content, etc.

Needham analysts said the originals are attracting new advertisers to Roku.

Evercore ISI analysts said they expected Roku to continue to be opportunistic in buying content to capture more ad budgets for connected TV.

“But we also believe that these investments should form a strong product differentiation gap that may well lead to greater pricing power for Roku over time,” they wrote.

Roku reported better-than-expected second quarter results last week, but showed streaming hours in the quarter were down by one billion hours from the first quarter of 2021. The company said ” component supply conditions and shipping constraints “continued to increase costs faster than expected.