With shares gaining nearly 150% in 2020, Roku ( ROKU -2.24% ) was a clear beneficiary of the COVID-19 pandemic as people streamed more TV on the platform than ever before due to lockdown orders and other restrictions. For a few months near the onset of the crisis, the broader advertising market took a dip due to all of the macroeconomic uncertainty. Fortunately, ad spending rebounded quickly heading into the end of 2020 as economies started to reopen.
Roku has now provided investors with preliminary estimates for a couple of its most important operating metrics to close out a blockbuster year.
Over 14 million active accounts added
Roku announced this week that it finished the fourth quarter with 51.2 million active accounts, up from 46 million at the end of Q3. That puts total active account additions for the full year at 14.3 million, as Roku finished 2019 with 36.9 million active accounts. Zooming out a bit, Roku's active account growth accelerated significantly during 2020 compared to prior years.
While the pandemic undoubtedly supercharged account growth and those effects will be temporary, it's also true that those users aren't going anywhere now that they're on the platform. Engagement was also strong, with total hours streamed hitting a record 17 billion in the fourth quarter. Dividing out the two metrics, that translates into an average of 332 hours streamed per active account, also near record levels.
Roku estimates that nearly a third of all U.S. households have now cut the cord in favor of over-the-top (OTT) streaming services. That secular trend isn't slowing down, and the tech company notes that eMarketer expects over half of U.S. households to cut the cord by the end of 2024.
The company also said that The Roku Channel grew its audience to a whopping 61.8 million people. If you're wondering how that figure is larger than active accounts, remember that each active account may have multiple users within a household and that Roku has been expanding The Roku Channel beyond its platform with an app and desktop interface.
The Roku Channel is an important growth driver for the company because it doesn't have to share ad inventory in the same way that it has to with third-party channels. With recent reports that Roku might scoop up Quibi's content catalog, there's potential for margin expansion since original content is more cost-efficient at scale than paying licensing costs for older content.
Roku didn't provide any financial metrics such as average revenue per user (ARPU) for the platform segment. That figure will show how well the company is actually monetizing the booming engagement on its platform. Roku monetizes users primarily via advertising. The streaming specialist will report full fourth-quarter results in February.