Shares of over-the-top (OTT) streaming platform Roku (NASDAQ:ROKU) have popped today, up by 7% as of 11:20 a.m. EDT, after the company received a bullish upgrade from Oppenheimer. Analyst Jason Helfstein boosted his rating on Roku shares to outperform while assigning a price target of $50, in large part due to the strength of The Roku Channel, which was launched in September of last year, just weeks before the company went public.

Helfstein estimates that The Roku Channel has a monthly run rate of 9 million hours streamed, making it the 12th most-watched app by viewing hours. Roku is also looking to build on that momentum, recently announcing that The Roku Channel will soon become available on Samsung smart TVs, creating an entire new advertising revenue stream outside of its core platform. Expanding The Roku Channel beyond its core platform will let the company "monetize a broader portion of the OTT ecosystem than we had previously assumed was possible," in Helfstein's view.

The Roku Channel on a TV

The Roku Channel launched in September. Image source: Roku.

The upgrade comes a few months after Oppenheimer bumped Roku from underperform to perform in March.

Why The Roku Channel is so important

There's no doubting the progress that Roku has made in pivoting toward its platform business, which is predominantly driven by advertising. Roku's advertising operations are also evolving rapidly: It recently bolstered ad targeting and introduced an analytics program that allows advertisers to better measure the performance of their campaigns.

Historically, Roku's platform was largely filled with third-party content, and the company would only be entitled to 30% of ad inventory on those third-party channels. As a first-party, ad-supported channel, The Roku Channel is incredibly important to Roku's future. Fortunately for investors, Roku continues to make progress with growing The Roku Channel in numerous ways. On the May earnings call, CEO Anthony Wood said that beyond Samsung, the company is "looking strongly at other platforms as well as places we could take the Roku Channel to expand our reach."

Roku's general manager of platform business, Scott Rosenberg, added:

The Roku Channel is already contributing significantly to our inventory mix and the audience that we sell to advertisers. I think also importantly, The Roku Channel, because of its growth, is proving to be a significant traffic driver, audience driver, for content providers into The Roku Channel. So it's become a vehicle by which content partners can go and build pretty significant OTT audiences.

Rosenberg also said bringing The Roku Channel to other platforms was all about "incremental reach," which amplifies the value that Roku creates for both content partners and advertisers.