Magazine article Variety

The Giant Killer

Magazine article Variety

The Giant Killer

Article excerpt

Roku founder and CEO Anthony Wood doesn't fit the image of your typical tech mogul. In person, he comes across as quiet and introverted. He keeps a low profile in public and eschews the Silicon Valley hipster look for country-boy outfits that include overalls and dad jeans with suspenders. But judging by the company's first earnings report in November, he's a bona fide billionaire, controlling just over a quarter of outstanding common stock for a company whose share price more than tripled since its September IPO.

Spend some time with the 52-year-old and you're not surprised at all to learn that he singlehandedly wrote Brightscript, the in-house programming language that powers the 5,000-plus apps currently available on Roku. "It was kind of a side project. Just for fun," Wood tells Variety. "Like a hobby; something I worked on for a few years."

Wood's understated demeanor shouldn't distract from the fact that he has been single-mindedly driving the ascent of Roku for the past 15 years, transforming it from a small hardware start-up to a publicly listed company with an estimated 2017 revenue of $500 million and a $5 billion market cap. Roku makes the most popular streaming players in the U.S., regularly outselling much bigger rivals like Google, Apple and Amazon, and has earned the financial backing of media giants like News Corp., Sky and Viacom. Now, the company is getting ready to upend the $70 billion business of TV advertising in the U.S. while also taking on Amazon's Echo and other smart speakers.

Roku isn't Wood's first stab at playing in the big leagues. "I've been starting companies since I was 19," he says. In 1996, Wood struck early gold when Macromedia scooped up one of his first start-ups for $36 million. But he also had some misses. In the late '90s, he built one of the first digital video recorders, only to see TiVo emerge as a victorious competitor. "That hurt," says a former employee, speaking with Variety on condition of anonymity.

The experience instilled in Wood a desire to get it right the next time around. His game plan: Found a company, grow it well, take it public. Over the years, Roku has been approached multiple times by big corporations looking to snap up the upstart, with suitors including Amazon, Intel and Cisco. Wood rebuffed them all and stayed the course.

Much of Roku's battle plan to take on internet giants like Amazon and Google as well as TV manufacturers like Samsung and Sony was set from day one, according to Wood. "We decided the best way to compete with those folks is to focus on value, content and ease of use," he says. "Those are our tenets, and they have worked really well for us."

After first dabbling in devices for digital photos and internet radio - and a brief stint at Netflix - Wood and his team began shipping Roku's first streaming player in 2008. That device looked a bit square, and Roku's original user interface was anything but flashy. Wood instead aimed for simplicity, banning all but the most essential buttons from Roku's remote control, and calling apps "channels" to help TV viewers in their transition to the new medium. "Companies commonly overdesign something and make it kind of pretty, but not easy," he says. "Customers, what they really want is easy."

Roku has kept its eye on simplicity ever since that first player while also making products that often are far more affordable than those of its competition. "People underappreciate how important price is," Wood says. "At the end of the day, $10 at retail makes a huge difference." Parks Associates senior research director Brett Sappington agrees that low prices were key to the company's success. "That really helped Roku," he says.

But while Roku was outselling Apple and long-gone start-ups like Boxee in the streaming-device space, a new threat was emerging: TVs with built-in apps. "A streaming media player is essentially a way to make a dumb TV into a smart TV," Sappington explains. …

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