Magnite and Roku are both products that benefited from transforming the traditional TV market into digital platforms.
Roku devices allow users to access various streaming apps. Roku sells ads and content partnerships across its digital service.
Magnite is the brainchild of Rubicon Project and Telaria. It serves ads for connected devices also.
Roku obtained over 69% of its revenue from its digital platform of ads and content partnerships last quarter.
The remaining percentage is generated from streaming hardware devices.
Roku’s digital platform provides higher-margin revenue that its hardware business faces severe competition from the likes of the Google Chromecast, Apple TV, and Amazon Fire TV.
Magnite became the world’s largest independent sell-side ad tech company after the merger between Rubicon and Telaria. Magnite obtained most of its profit from mobile platforms.
Magnite estimates that the growth of the connected TV market will speed up and overpass other platforms.
Roku’s revenue increased by 48% year-over-year in the first six months of the current year. Its progress shows that it isn’t ceding the streaming device market to the likes of Google, Apple, or Amazon.
The company’s platform gross margin contracted because of slower ad sales during the ongoing pandemic. However, the player’s gross margin grew as it offered fewer promotions, which means that it still has a say in pricing power in a crowded market.
CEO Anthony Wood stated that the “ongoing COVID-19 pandemic is accelerating the macro trends that will define the streaming decade.”
Magnite, on the other hand, registered a 12% year-over-year revenue increase in the first half of 2020. Its mobile revenue grew by only 4%, while its desktop revenue decreased by 4%.
The company is severely struggling with unprofitable ad spending throughout the ongoing pandemic.