Roku (NASDAQ:ROKU) was already one of the star performers of 2020, with its stock rising 148%. The combination of remote work and stay-at-home orders that blanketed much of the world last year gave rise to a dramatic increase in streaming. Roku was able to capitalize on this accelerating demand during the pandemic, expanding its reach to a greater number of viewers than ever before. As a result, revenue for the first nine months of 2020 grew 57% year over year, and in the third quarter, the company flipped to profitability.

Roku is one of the undisputed leaders in the streaming video space, but several announcements during the past week illustrate why Roku's dominance is just beginning.

Hand pointing remote at TV showing streaming video service

Image source: Getty Images.

1. Outpacing Amazon

Over the past several years, Roku has been playing leapfrog with tech giant Amazon (NASDAQ:AMZN) and its streaming video platform, Fire TV. Early last year, the e-commerce behemoth announced that it had topped 40 million monthly active users, jumping ahead of the 37 million users on Roku's rolls to close out 2019.

However, 2020 has been a turning point in many ways, and Roku's growth has been accelerating just as Fire TV's growth has begun to slow. Amazon recently said its user base had climbed to 50 million in 2020, an increase of 25% year over year. Not to be outdone, Roku released figures this week that show it has taken the lead with 51.2 million active accounts, up more than 38%. Not only that, but Roku users are highly engaged, spending more than 3.5 hours on the platform per day.

Not many companies can go head-to-head with Amazon and beat the company at its own game. Add Roku to that list.

2. Roku acquires Quibi content

After weeks of rumor and speculation, Roku announced Friday that it had acquired the global distribution rights to content from Quibi, the ill-fated, smartphone-focused streaming service that shuttered in October, just six months after its debut. 

Roku said it acquired more than 75 premium shows and documentaries from Quibi's playlist, which will now be shown exclusively on The Roku Channel, the company's flagship ad-supported streaming channel.

This includes "Emmy award-winning scripted series, alternative and reality programming and documentaries featuring stars such as Idris Elba, Kevin Hart, Liam Hemsworth, Anna Kendrick, Nicole Richie, Chrissy Teigen, and Lena Waithe," according to the press release. Roku also said that more than a dozen previously un-aired Quibi programs would make their debut on The Roku Channel.

This is the latest move to bring more premium content to The Roku Channel. This strategy is paying off, as viewer growth for the channel is growing faster than overall user growth. In the fourth quarter, The Roku Channel reached an estimated 61.8 million viewers, doubling year over year. 

A man with a remote watching a wall of television screens.

Image source: Getty Images.

3. Connected TV dominance continues

One of the not-so-secret weapons in Roku's arsenal is the Roku connected TV operating system (OS). The company designed its OS from the ground up, rather than repurposing an existing mobile app. The user-friendly interface and easy-to-use platform have attracted a growing number of connected TV manufacturers, who license the OS rather than reinventing the wheel. This gives Roku much greater reach than it could achieve with its streaming boxes and dongles alone.

This strategy continues to bear fruit. Roku announced on Friday that the Roku OS was the No. 1 smart TV OS sold in both the U.S. and Canada to close out 2020. Roku-branded TVs boast a 38% market share in the U.S. and 31% in Canada. 

The program has been so successful that Roku is using this simple approach to enter international markets, including the U.K., Mexico, and Brazil. The company is also expanding the Roku TV to additional manufacturers in the U.S.

What it all means

The major subscription streaming providers are spending billions of dollars on content battling for viewers. Roku has taken a different approach. The company provides a channel-agnostic streaming platform that takes all comers, welcoming ad-supported and paid streaming services alike. Roku provides access to more than 10,000 available channels on its platform. This unmatched selection has helped the company amass more than 51 million monthly active viewers, and that growth rate is accelerating.

Each of these recent announcements helps illustrate why Roku's dominance will continue enriching shareholders along the way.

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.