Roku Channel: How to Make One, How Much it Will Cost, & How to Monetize
Jose Rengifo
Roku is dominating the streaming device market. Here's how you can build a Roku channel and leverage the rapidly growing demand for OTT viewing.
Over-the-top (OTT) streaming is the future of entertainment media. And with more than 32 million active monthly users worldwide, Roku is leading the way.
According to the most recent data from Park Associates, almost 40% of all OTT app users worldwide stream on a Roku device. So, if you're a content publisher that wants to survive in 2020 and beyond, launching a Roku channel should be at the top of your to-do list.
But developing and launching your own channel isn't easy, even for the most experienced programmers and developers. If you're looking to get started, here's what you need to know.
What is Roku?
Roku is a line of products (made by the company Roku) that enable viewers to stream content from the internet directly to their televisions. The company's product line includes streaming sticks, streaming boxes, and smart TVs with built-in streaming technology.
Roku OS is the software that runs on these devices and provides access to over 5,000 channels (both free and paid). Not only can viewers stream their favorite blockbuster movies and the latest TV shows from services like Netflix, Amazon Prime Video, and Apple TV+, but they can also watch live sports and catch up on the news with channels like ESPN, BBC Sports, CBS News, and Newsy.
Why Should You Create a Roku Channel?
Creating and launching an OTT app can be a profitable business decision. The success of Netflix, Disney+, and Amazon Prime can all attest to that. But out of all the OTT platforms, why should you choose Roku?
Roku stands out as an obvious choice, as it's the one of the largest streaming platforms in the United States. With over 32 million active monthly users, the platform has a reach that's equivalent to the largest cable providers in the United States. It is clear TV viewing is shifting to streaming platforms, and Roku is dominating the market.
Building a Roku channel can help you reach audiences that no longer exist on traditional TV and build a profitable channel through subscriptions and advertising. You can even gain access to Roku's first-party proprietary data to maximize user experience and drive ad revenues.
How to Make a Roku Channel
Roku is an open platform: meaning anyone can create a channel to share their content, either publicly or privately. There are two primary methods for building a streaming channel:
Method 1: Roku SDK Developer
Method 2: Roku Direct Publisher
If you want a custom channel, the easiest solution is to outsource your project to a specialized developer or firm such as Zemoga. An experienced professional, or team of professionals, will design and develop a channel to your exact specifications using Roku's SDK Developer–a tool specifically designed to help developers create a custom channel from scratch. If you choose to build an internal team, be aware that the SDK Developer method requires significant technical knowledge, including experience with Scenegraph framework and Roku's proprietary coding language "BrightScript," so budgeting for this may be more expensive than with going with an experienced firm.
Depending on the scale of your project, this method can take between 3 to 6 months to complete and is typically more expensive. Publishers who choose to build a custom SDK channel are prioritizing user experience and long-term profitability over speed of development.
Roku Direct Publisher is intended to allow content creators to quickly build a simple channel without the need for coding or programming knowledge. Below is a quick overview of how to get started using the platform.
Step 1: Set up a Content Hosting Solution
Before you begin, you need to upload your content to an Online Video Platform (OVP) or Content Delivery Network (CDN). These are third-party servers that host your video content and deliver it to your Roku channel.
Step 2: Create a Content "feed"
Once your content is hosted on the web, the next major step is to create a "feed" of all the hosted content. This is a piece of code that contains all the metadata needed to play your content on a Roku device such as the title, short and long descriptions, URL to the content, etc. The feed must be in an MRSS, XML, or JSON file.
Step 3: Create Your Roku Channel with Direct Publisher
After completing the first two steps, you can start creating your Roku channel using the Direct Publisher interface. This tool will guide you through the steps to create your channel and publish your content, but first, you will need to complete the following prerequisites:
Create a Roku customer account at my.roku.com/signup
Create a Roku Developer Account at developer.roku.com
Connect a Roku device (software Release 2.7 or later) to a TV or computer monitor, or alternatively, get yourself a TV with a built-in Roku device.
Publishers who choose the Direct Publisher method are essentially choosing affordability and speed of development over more advanced features. For instance, Direct Publishers cannot monetize their channel through on-screen purchases and subscriptions. It's essentially a "cookie cutter" app that allows content creators to upload videos to a predefined user interface. As such, Direct Publisher is a smart solution for small businesses or those just starting out within the streaming space.
Roku Channel Development Cost
The Roku company itself does not charge any setup costs, nor does it charge a monthly fee to keep displaying your channel on its platform. However, there are additional costs associated with developing a Roku channel and streaming your content, which we discuss below.
Initial development costs can start from $1,500 for a simple Direct Publisher channel. These types of channels play videos (with ads), although they do not allow for traditional forms of monetization, such as monthly or yearly subscriptions. Due to their low setup costs, Direct Publisher channels are the ideal option for companies looking to stream free content on a private channel.
Although, if you're looking to create a paid channel that supports subscriptions, you will need an SDK Channel to build the app from the ground up. In this case, your costs will depend on the complexity of the project and the caliber of the development team you bring on or partner with. Roku development partners like Zemoga have demonstrated success effectively developing and launching channels on the Roku platform (we assisted bringing Hulu to Roku), potentially saving you money in the long-run.
However, if you don't requite the caliber of developers within the Roku development partner channel, Roku mentions that contractor sites like UpWorks may work for smaller projects.
Content Hosting Fees
Regardless of the type of Roku channel you choose, your budget should take into account hosting fees. Roku allows you to stream your content from any video hosting provider, including Online Video Platforms (OVP) and Content Delivery Networks (CDN).
Packages are typically paid on either a monthly or annual basis, and you can often get significant discounts for choosing a longer plan. Prices depend mainly on the size of your company, with packages priced according to the numbers of users and storage space required. For example, Vimeo's plans range from as little as $9/month for a single user (5GB/week) to $95/month for more than 10 users and unlimited live streaming.
A small, personal business with no more than 10 team members will get away with an OVP, like Vimeo or Wistia. However, medium to large corporate companies will benefit from a more high-performance provider, which offers a more comprehensive package, including robust marketing, analytical tools, uncompromised security, and 24/7 technical support.
Roku Channel Monetization
Monetization is built into Roku's platform. However, the method of monetization available to you will also depend on whether you choose to create your channel with Direct Publisher or Developer SDK. You can access Roku's monetization features through the Developer Dashboard.
Video advertising is one of the most popular ways to monetize a Roku channel and can be used on both Direct Publisher and Developer SDK launching platforms. Roku offers two revenue models for video advertising: Inventory Split or Revenue Share.
Inventory Split:
If you launched with Direct Publisher, you automatically enter Roku's Inventory Split model by default. This means you (as the publisher) are responsible for sourcing and configuring 70% of your own ads. The benefit of doing this is that you reap 100% of your ad revenue. Plus, you're in control—meaning you can source highly relevant ads that will appeal to your target audience and have minimal impact on user experience. Of course, this requires a lot of work. And Roku reserves the right to serve ads from its own ad network on the remaining 30% of your channels, from which it retains 100% of the profits earned. This model can be highly profitable for large corporations that already have an ad sales team and are up to date with the technicalities and legalities of ad content.
Revenue Share:
The Revenue Share model means that Roku manages 100% of your channel's advertising and will share 60% of the net revenue earned with you (minus 15% operational and service fees). Roku will attempt to serve relevant ads that will maximize your monetary returns. It's in their best interest to retain viewers, after all. This hands-off model requires minimal effort from the publisher and is, therefore, an excellent option for personal and small businesses who would rather focus on creating great content. Just be wary of the impact ads are having on your UX. The Revenue Share model is available on both launching systems.
Roku Pay and In-Channel Customer Purchases
Roku Pay allows you to sell access to your content directly through an In-Channel Store with free trials, one-time fees, as well as monthly and yearly subscriptions. For those willing to endure a lengthy application and approval process, there's also an option to sell non-consumable and consumable products. But, keep in mind, Roku takes 30%.
Roku Pay is currently only available to those who have launched with SDK Developer. It's an excellent way to launch a pay-per-view channel—but it's highly recommended not to run ads on your PPV content as it diminishes the user experience.
If you already have an engaged audience and metrics to back up your traffic, then product placement could be a profitable venture for your channel. Product placement is when companies pay you to mention, display, or use their product or service within your content. It's commonly seen in movies and TV shows, as well as Instagram these days. Depending on the type of content you create, you may have inherent opportunities for product placement. For example, a successful fitness channel may find that Lululemon is willing to pay you to wear ONLY their clothing—or maybe, they'll provide their clothing or equipment for free.
There are many ways to monetize your Roku channel, and this is in no way an exhaustible list. Regardless of the monetization strategy you choose, remember that data and analytics set the tone for success.
Are you Looking to Create a Custom Roku Channel?
If you're looking to build a Roku Channel that pushes the envelope, get in contact with Zemoga today. Our dedicated OTT experts have been partnering with Roku since 2014 to design and develop premium channels. With a proven Roku development methodology and fluency across the entire SDK Developer framework, your channel will have a flawless finish and the velocity to match the demands of today's consumers.
7 Do's and Don'ts of Running a Successful OTT Service in 2022
Designing Interactive Experiences for TV screens: OTT 10-foot Design
The User Onboarding Process: Conversion Optimization Lessons from Netflix
Roku Channel Monetization: Make Your Roku App Successful
Copyright © 2022 Zemoga.com