Shares of Roku (NASDAQ:ROKU) are hitting all-time highs this week, rolling along as a leader in the streaming video revolution. The stock has almost tripled in the second half of this year after a surprisingly sluggish performance through the first six months of 2020.

Which Roku will investors be getting in the year ahead? The stock surprisingly declined through the first half of this year despite being an obvious beneficiary of shelter-in-place mandates in the wake of the COVID-19 crisis. It has bounced back nicely in recent months despite failing to come to terms to get HBO Max on its platform. It's hard to bet against the bulls in this tug-of-war. Tune in to learn why this is a stock worthy of your next $5,000 investment. 

A woman happy to be channel surfing with one hand and grabbing popcorn in the other as she watches TV.

Image source: Getty Images.

It's a brave new world

We're not going back to conventional broadcast television, so let's eliminate that potential model risk from the Roku equation. The market will keep growing at a heady clip for streaming television in 2021. The real question here is about market share. Roku will have to fend off tech and media giants with strong aspirations to eat into the platform's dominant position, and it's easy to see why rivals will be gunning for Roku in 2021. 

There are now 46 million active accounts relying on Roku as their gateway to video entertainment. They're highly engaged, averaging 3.5 hours a day on the platform. The pandemic helped pick up the pace, but Roku still had you on the couch for more than three hours a day before the virus outbreak.

Roku itself is free to use, but it cashes in from royalties it collects from the apps on its platform when someone signs up through Roku, as well as shared ad revenue. Average platform revenue per user is $27 over the past 12 months, a seemingly small amount of money, but it's growing nicely as Roku's monetization prowess grows. Average revenue per user has climbed 20% over the past year, and that's stacked on top of the 43% increase in active accounts. 

There were questions about the Roku model earlier this year when Comcast's (NASDAQ:CMCSA) Peacock and AT&T's (NYSE:T) HBO Max launched without coming to terms with the leading hub. Comcast finally came to terms with Roku to get Peacock on the platform. HBO Max is still on the outs, but it's hard to argue that Roku is the one suffering on that front.

Peacock and HBO Max suffered through weak launches, and not being on Roku likely played an important role by limiting consumer accessibility. Peacock failed to generate initial buzz for its service. AT&T has 38 million HBO and HBO Max subscribers in the U.S., but just 8.6 million HBO Max activations are included in that mix. AT&T is doing a lot to pump up interest in HBO Max. It's offering it at no additional cost to select wireless subscribers. It's gutting the box office potential of its entire 2021 slate of Warner Bros. theatrical releases by making them available on HBO Max the same day they hit the multiplex. 

Roku investors aren't breaking a sweat. There's a good chance that AT&T plays nice with Roku soon. If Wonder Woman 1984 -- hitting HBO Max and movie theaters on Christmas Day -- doesn't see a spike in HBO Max activations it's not as if AT&T will have much of a choice. Roku has a stranglehold on 46 million homes that do a lot of streaming. Roku may very well emerge out of this with even more leverage than it has now. 

It's hard to bet against Roku in 2021. It's a frenemy media stock, but more friend than enemy when the ultimate goal for every content creator is to have its entertainment in front of as many eyes as possible. Roku has had a monster second half in 2020, but it's just getting started.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.