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Roku’s Strategic Shift from Hardware to Platform Revenue
Roku’s Strategic Shift from Hardware to Platform Revenue
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BTCCSquare news:
Roku's stock (ROKU) has seen a dramatic 80% drop from its peak despite a 27% climb in 2025, prompting investor interest. The company's revenue model has shifted significantly—hardware now accounts for just 12% of revenue, down from 54% in Q2 2017. The platform segment, driven by advertising and subscription deals, now dominates with a 51% gross margin, while hardware sales often operate at a loss.
Roku's strategy hinges on expanding its device footprint to monetize viewership through its platform. This pivot reflects broader trends in streaming economics, where content and ad revenue outweigh hardware margins. The stock's volatility underscores the challenges of transitioning from a hardware-centric to a service-driven model.
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