Media-streaming technology expert Roku (ROKU 0.35%) is pulling out all the stops for its latest nugget of original content. The company is promoting the living daylight out of Weird: The Al Yankovic Story, and then using the movie itself to spread the word about Roku's own streaming channel.

I think that's absolutely the right thing to do. This one-two marketing punch looks like a defining moment for Roku's ad-supported streaming service.

What's going on?

Weird is a tongue-in-cheek biopic about comedy musician Weird Al Yankovic, with Harry Potter star Daniel Radcliffe in the titular role. Westworld headliner Evan Rachel Wood plays Madonna, Weird Al's love interest and nemesis.

This is a passion project for Weird Al, who is credited as a writer, producer, and supervising music producer. This idea started as a short trailer for a fake Weird Al biopic in 2013, produced by Will Ferrell's comedy studio, Funny or Die. That video went mildly viral, and Weird Al's fan base wanted to see a full movie matching the trailer. A decade later, the creative minds behind the movie considered taking this joke to the next level, and the project turned a corner when Radcliffe agreed to star in it.

Two people on the TV couch. One laughs at the screen, the other looks away with a frown.

Image source: Getty Images.

With a bona fide movie star on the roster, Roku agreed to invest in the full-length feature film. With Roku's backing, the crew had a $12 million budget to work with. According to Yankovic, other studios were interested but only Roku "whipped out their checkbook" during the negotiations.

Originally planned for shooting in Georgia, in order to save costs, the production was moved to Los Angeles. This change allowed Weird Al to feature drop-in cameos by a long list of Hollywood luminaries -- always playing another entertainment luminary rather than themselves.

Weird premiered at the Toronto Film Festival in September, where it won the People's Choice Midnight Madness Award. Sounds about right.

How is Roku promoting this movie?

At first glance, the film got the usual run of perfectly normal studio support.

  • Radcliffe, Yankovic, and Wood toured the late-night talk show circuit and other media outlets.
  • Roku ran a sweepstakes lottery featuring an all-expenses-paid trip to the premiere and a 65-inch Roku TV set.
  • T-Mobile (TMUS -0.18%) signed on as the lead sponsor. The telecom's involvement was partly inspired by a wide-open creative playbook, and partly by Roku's heavy marketing investment.
  • Of course, Weird Al hyped the upcoming movie at more than 100 stops of the Unfortunate Return of the Ridiculously Self-Indulgent, Ill-Advised Vanity Tour. The run of mostly intimate venues started in April and ended with an extravaganza at New York's Carnegie Hall, the week before Weird's premiere.
  • As the proverbial cherry on top, the film was featured on that iconic video billboard at Time Square on November 4, the launch day for the streaming video version. That's a premium piece of advertising real estate, which must have cost Roku a pretty penny.

This would be normal for a guaranteed blockbuster from one of the leading film studios, but we're talking about a $12 million budget and a newcomer to the movie production business. Weird isn't Roku's first original production, but this company's originals are almost always series rather than movies.

And Roku isn't exactly flush with cash reserves. The company has $2 billion of cash equivalents on its latest balance sheet, but only after issuing $1.49 billion of new shares over the last three years. The company isn't shy about asking investors for help to keep the lights on.

ROKU Shares Outstanding Chart

ROKU Shares Outstanding data by YCharts

Making the most of a big investment

As a lifelong Weird Al fan, I caught the Tampa installment of the recent tour and watched Weird with my first cup of coffee on Friday. The movie has earned a respectable quality score of 87% from critics on Rotten Tomatoes and a 93% thumbs-up rating among Google users. Again, that sounds about right. This is a thoroughly enjoyable spoof of the biopic genre, and the cast features enough big-ticket names to turn some heads. If you get people to watch it, they should enjoy it.

And when the viewers come, they will face several unskippable commercial breaks. The usual collection of ad spots for laundry detergent and car insurance get minimal screen time, but each ad block features two mandatory ads. The first 40-second spot is for lead sponsor T-Mobile, which makes sense. The second extra-long advertising roll is all about the Roku Channel itself.

You don't see that very often, do you? Sure, TV and radio stations name-drop their own services as often as possible in their content streams, but it's rare to see a full-featured ad spot trumpeting the virtues of the very channel you're actually watching. Furthermore, the first ad break starts with a brief appearance from Weird Al himself, making sure that the viewer knows that this is the Roku Channel. The company leaned into every opportunity to promote the underlying streaming service here.

So Weird looks like an effective tool for bringing more viewers into the Roku Channel experience. This streaming platform is an important piece of Roku's advertising-based revenue streams, built around the purchase of the bankrupt mobile streaming service Quibi's media library in 2021.

Mind you, Roku shouldn't be desperate to grow its basic user count. The number of active Roku accounts rose 16% year over year in the recently reported third quarter, stopping at 65.4 million names. The company has added a steady stream of new customers at a time when streaming stalwarts Netflix (NFLX 0.51%) and Walt Disney (DIS 0.22%) struggled to do the same.

What Weird means to Roku investors

Still, it never hurts to add a few names to that customer list, especially if it also gives a specific boost to the streaming channel. Many people use their Roku TV sets or media-streaming dongles for years without paying any attention to another streaming service owned by the platform maker. For example, I have used Roku devices for years and never bothered checking out the Roku Channel until this Friday. I can't be the only user who discovered the Roku Channel thanks to Weird.

And that's important. If Roku can demonstrate rising interest in its ad-based streaming service, it will be able to negotiate higher payment rates for ad spots on that channel. Weak ad sales have weighed on Roku's financial results and stock performance in 2022. Shares prices are down by 79% year-to-date.

The company would love to get out of that funk, and Weird could be just what the doctor ordered. The movie may be silly to the core, but it's also a high-quality product from a stable of household names, and Weird Al comes with a pre-made fan base in the millions. I'm not saying that Weird alone will save Roku's bacon, but it's a good start to a long-term campaign of rebuilding and recovery. Since the stock is found at the very bottom of Wall Street's bargain bin right now, I think it's a good idea to pick up some Roku shares on the cheap.