Why Sports Streaming Is Fragmented and How Roku Is Solving Discoverability | Joe Franzetta, Head of Sports at Roku

A 21-Year-Old Interactive TV Prediction

Tim Rowe, Host at State of Streaming 0:45

Today's conversation starts with a look back in time at a prediction by today's guest, who is Joe Franzetta, head of sports at Roku. And what's fun about that look back is the prediction is actually about how we'll be interacting with our televisions. Only that prediction was not about sports, it was about soap operas and being able to buy a couch that we saw in the background. And what's fun about having that prediction is to apply it to today and what that looks like for the Roku sports team. We talk about solving discoverability fan first. We talk about what partnerships with the Savannah Bananas look like and how that uniquely comes to life inside of Roku City. And we talk all about the Roku sports zones, which drive incredible fan engagement and true meaningful growth for leagues. Make sure to subscribe wherever you're listening and enjoy today's conversation. Joe Franzetta, you're the head of sports at Roku. I want to start our conversation today about something you said 21 years ago regarding soap operas. Okay. Almost 21 years to the day. If you are watching a soap opera and you want to purchase something you see on the show, such as a mirror or a dress, something that was placed there through product placement deal that the network did with the producer, the viewer can pick up the remote control and scroll around, get more information on the product that was placed right there. If they wish, they can purchase it. That was 21 years ago. And we're going to talk about sports on-screen engagement, personalization. Maybe take it a little bit longer to get to this point, but you've been in the driver's seat seeing this evolution come to market 21 years ago to get here.

Joe Franzetta, Head of Sports, Roku 2:32

I've certainly been in the clown car with everybody else. I don't know about the driver's seat, but um, it's interesting to hear that. I did not know that or recall that specifically, but I can imagine and sort of remember the circumstances developing a technology that was intended to, you know, create interactivity around the television experience. And I think that to your point, we may have been a little bit ahead of our time or the technology was maybe a little bit ahead of the execution. But things have evolved, and you know, we're in a world now where that type of viewer experience, that type of interactivity in that flavor from a commerce perspective, but as well as other flavors just from a you know interactive experience perspective, has certainly it's come to fruition and and here we are. We're in a world of streaming television, and streaming television has a lot of different components to it that that really do touch on some of those early experiments that were being done in the interactive television space. So it's it's funny to hear that. It's also, you know, 21 years, uh blink of an eye.

Tim Rowe, Host at State of Streaming 3:38

So it happens fast. And sports are the perfect home for that. It's where we see the biggest audiences come together, it's where we see the most captive attention. What I think would be helpful maybe for our audience to understand is Roku as a business. Can you can you maybe paint the picture of how Roku as a platform is maybe a little bit different than Roku as a service?

Roku As Platform Versus Service

Joe Franzetta, Head of Sports, Roku 4:00

Sure, sure. That that's a great question and a good starting point. Uh, I will look at it through the lens of sports, of course, but at a high level, Roku is a platform. It is a television operating system, it is the front door to your television experience. You turn on your TV and you see the Roku experience. You know, you might be seeing Roku City, you might be seeing the Roku home screen, but you are seeing the aggregated experience that Roku as a platform or device manufacturer, but we're also a licensor of an operating system to other third-party television manufacturers. And that is effectively where all of your television experience starts, right? It's your direct-to-consumer apps, it's the pathway into other partners that you may have a subscription with, whether you know it's a Peacock or Paramount or Netflix or whoever it might be. And it's also then a gateway for content that the Roku channel, which is our service, which is you know more of uh an app, really, a service that is an aggregation of first-party content where we are working with our internal teams and our external teams to produce content, to license content, to create a first-party content experience with the Roku channel, an ad-supported, free to the user service that is one of many services on the platform. So the platform is that home screen, it is that front door to all of your television experience, it is experiences like the Roku City experience, the screensaver, and then the Roku channel is our first party service where we are aggregating content from partners and producing ourselves.

Why Roku Partnered With Savannah Bananas

Tim Rowe, Host at State of Streaming 5:49

Excellent. I've got three examples for us to talk through here today. One, everyone's favorite, the Savannah Bananas. Uh, a second one here, most recently, the tennis channel and Roku announcement. And then also the National Women's Sports League. I thought those would be three good examples that kind of tease out the Roku sports strategy and how you're kind of checking off these different boxes. But a fun story that I've heard you talk about is the Savannah Bananas and what they were able to do via the Roku platform. We know that Savannah Bananas can be streamed in lots of places. I know my son watches the Savannah Bananas often on on YouTube and is a big fan. We went to Little League World Series recently. Actually, the gentleman that sang the national anthem was a Savannah Banana and Broadway actor. So there's just so much excitement about the Bananas. Can you take us through that? How did the Savannah Bananas Roku partnership come to be?

Joe Franzetta, Head of Sports, Roku 6:45

So we reached out to, you know, we saw what they were doing, we thought it was really exciting and thought it was really interesting, and that there were things we believed we could do on the Roku platform that would differentiate the experience. You know, first of all, Jesse Cole and his team do an amazing job of putting on just a phenomenal show. It's uh it always amazes me to see how they are so well synchronized in things like you know, big Broadway productions on a baseball field, essentially, while also being really good baseball players. While playing baseball. While playing baseball, exactly, and and integrating those two things and taking that show on the road. And now with the league, they have six teams. And it's just it's really amazing what they've done. And so what we discussed with them was well, we want to be able to put you front and center on our home screen, which is, you know, over a hundred million households, half of all broadband homes uh in the US, number one television operating system in the US and Mexico. We've got distribution internationally. We're beginning to grow in a lot of different directions. But we have a very powerful home screen. Back to your point about the fact that we're both a platform and a service. Think of the Savannah Bananas on the Roku channel as being part of our service, but our promoting them, you know, on our home screen as part of the platform. But what we wanted to do was capture some of what the Savannah Bananas bring to the live experience. If you, you know, go to a live Savannah Bananas game, it's a really sort of multimedia experience in real time. It's very exciting. And how do you capture that for the audience that's at home? So not everybody gets to go to a Savannah Bananas game. They do a great job of being all over the country, but it's a it's a tough ticket. It's a hard ticket to get. So we are you know able to build out experiences around what the Savannah Bananas do, to try to bring it a little bit more to a home viewing audience what that experience in the stadium is

Inside Roku City’s Clickable Stadium

Joe Franzetta, Head of Sports, Roku 9:10

like. So, for instance, talking about uh Roku City, which is our screensaver that is beloved by many. And I think uh you mentioned on uh uh previous conversation about the idea of people sort of looking out for what's new in Roku City. There's always some new Easter egg, there's always something new to discover there. We integrated Grayson Stadium, which is the Savannah Bananas home stadium in Savannah, obviously. And it was a clickable building within the Roku City. So when you saw the Savannah Bananas Stadium and the Grayson Stadium scroll by, you could click, you could hit the up button on your remote. That would enter you into the stadium, you know, the virtual stadium. You're greeted by a video message from Jesse Cole welcoming you to the Savannah Bananas on Roku, talking about an upcoming game that we had at the time of this execution. And it was, you know, the the animation of the uh inside the baseball stadium would show you the pitcher with the stilts throwing a ball towards you, showing the uh players in the backfield flipping. So a little bit of that sort of what's that in stadium experience look like, and just something fun, just something differentiated from just watching the game itself. When the pitcher throws the baseball towards you, it then expands into Banana Ball Zone, which is a dedicated destination for the Savannah Bananas on the platform, part of our larger sports zone experience, which I can talk to in a minute. And that experience is the live games, access to the live game, whether it's on Roku or importantly on one of their other distribution partners, because again, we are a platform. All of their distribution partners are on Roku. So we aggregate all of the live games into one destination. So you can get to the game that's on the Roku channel, or you can get to a game which is on one of their many other distribution partners, and it's all in one place. So we're providing a service to the viewer, we're providing a service to the Savannah Bananas, and we're providing a service to our distribution partners who are integrated in this experience. But we also have clips and highlights and other fun VOD content from the Savannah Bananas that are part of that destination. So, yes, it is a way to get to the live games. It's a guide for helping solve some of the fragmentation and disaggregation issues that you get as the world moves from linear television to streaming. We help solve for that. But we also are creating more of an always-on experience with additional content and making that experience sort of fun and differentiated. And as I said, sort of always on, meaning, yeah, when the games are on, you can get to the games. But when the games aren't there, you might just want to watch clips from last weekend's game or some other fun videos that they've provided. So, you know, that that's really the conversation that we had with the Bananas, which was we can present your games, you know, in a very visible way on our platform, and we can create interesting experiences on our platform that are both sort of fun entry points as well as fun destinations and always on destinations with more content. So if you look at it comprehensively, that's sort of our overarching perspective on how we approach these partnerships with partners like the Savannah Bananas.

Sports Zones And Solving Discovery

Joe Franzetta, Head of Sports, Roku 12:26

Tim Rowe, Host at State of Streaming 12:26

And I think not to speak for Mr. Jesse Cole, but that sounds like a fan first experience, putting all of that content into one place. You mentioned that's called the sports zones, and this isn't something that's exclusive to the Savannah Bananas. This has really been a larger part of the sports strategy at Roku. Can you maybe take us through all of the sports zone? Not necessarily name all of the sports zones. Yeah, yeah. Take us through a little bit of the thesis behind the sports zones. You've described a little bit of what the benefits are for the fans. How do you make it all work?

Joe Franzetta, Head of Sports, Roku 12:58

So it is, in fact, our North Star, to your point about the thesis of our sports strategy, which is Roku is a massive platform, right? We have distribution over 100 million households. We're in half of all broadband homes in the US. It's the number one television operating system in the US and Canada. We've got international expansion, we're in Mexico, we're in Brazil. Like we're, we're, we're growing. And as a massively distributed platform, we also have all of the content that you, you know, the vast majority of the content, I should say, in the television ecosystem. It's on our platform. We are the front door to that content, as I've said before. The challenge that we've seen with sports is the world has moved to from linear to streaming has been fragmentation of rights. You know, where a rights partner used to be on one or two or maybe three partners. Now you're seeing four, five, six, seven partners. And they're different. They're different partners than you've heard of before. And you've got disaggregation. So whereas it all used to be sort of in your cable bundle and you use your remote control to go up and down the dial, it is now on a number of different apps. It's on different services. And that friction can be frustrating, of course, for viewers. And that friction can be challenging for, you know, the owners of the rights, for the distribution partners of those rights, the advertisers who want to reach them. So our North Star has been well, let's create an environment. Let's aggregate that content in a way that makes it more seamless for viewers to get to the content that they want to get to. So we we design something that we call Sports Zone. Sports Zone is a centralized location on the platform that you can get to from many different ingress points throughout the platform, whether it's through the home screen or it's a specific tile, a specific game or whatever it might be. You can get into this aggregated destination where we have all sports, effectively all sports, aggregated by sport type, by provider. There's a lot of different ways we can slice it. But the idea is to get an aggregated destination so that it's much easier to find the content that you want to find. And we organized it originally by, you know, football, basketball, baseball, hockey. And we started getting a lot of feedback from league partners that wanted to have a little bit more of a branded experience on our platform. So we started working with leagues like the NFL, like the NBA, NHL, MLB, WNBA, NWSL, et cetera, et cetera, building dedicated branded destinations with their IP and integrating all of their partners into these destinations. But not only that, adding content. So like we did with Savannah Bananas, when you have all the destinations I just named, aggregating that all into one dedicated destination for that partner is extremely powerful. It's a great way for viewers to find what they want to watch. It's a great way for the rights owners, the leagues themselves to know that their viewers can easily find their content. It's a great way for their distribution partners to be part of an ecosystem where people can easily find the games that are on their particular service. And it's a great way for advertisers and sponsors to reach those audiences. So it really sort of serves the benefit of everybody involved. And what we've tried to do and continue to do is refine that experience, add to that experience, add personalization to that experience. Who's my favorite team? I can pick a favorite team. And now, you know, we're going to make sure through our algorithms that you're going to see the game tile or the destination for a game that's your favorite team. We're going to elevate clips and highlights of your favorite team. We're going to create the experience in a way that both caters to you personally and a personalized experience, but also keeps in mind that sports is tribal. You're a part of a community. And how do we help build that community on top of the platform in a way that, again, services all those partners, the viewers, the distribution partners, the leagues, the sponsors, et cetera.

Personalization Signals And Clean Metadata

Joe Franzetta, Head of Sports, Roku 17:16

Tim Rowe, Host at State of Streaming 17:17

Joe, let's spend a minute on personalization. I've heard you talk about the importance of clean metadata for discovery and simplifying some of the personalization. How do you think about personalizing what you've described as it is, it's pretty fragmented. It's uh it's hard. We're already doing a good job of aggregating it. How do we then go to that next level of personalization?

Joe Franzetta, Head of Sports, Roku 17:40

Yeah, it's a great question. And I think, you know, to your point, the aggregation and the disaggregation, the fragmentation, I think we've done a really good job of building an experience that removes a lot of that friction. And then the question becomes, well, what can we add to that? So streaming, streaming adds a number of different dynamics to the viewer experience that don't exist in the linear experience. So if you help solve for the friction and you help remove the friction, then you can start adding to the experience in a way that goes beyond what you could do on linear television. And personalization is certainly a big component of that. And personalization comes through a number of different ways, but primarily you've got explicit signals. Somebody, you know, Tim says, I'm a fan of, I don't even want to guess the New York Giants. Uh we'll go with it. Okay, we'll go with the New York Giants. So you you you explicitly tell us who you are a fan of, but there's a lot of implicit signals too, in terms of understanding what services you use. If you tune into a Giants game every Sunday, we know you're tuning into a Giants game every Sunday. If you're clicking on Giants highlights in the NFL zone, we know you're likely to be a Giants fan. So there's a lot of signals that we can aggregate within our algorithms to try to surface relevant content to you in as many different places and in as many different ways as possible across the platform. We also then will, in terms of the digital experience, we want to make sure that we keep layering on attributes that make a more personalized experience. So, you know, score strips or odds integrations or things like that, where you start to build an experience that goes beyond what a linear television experience could be. And as you look into the future, back to your first point about merchandising and e-commerce or t-commerce, I should say, for a soap opera. My days of focusing on soap operas are behind me, but you know, merchandise sales, right? Ticket sales, food delivery, there's a lot of different things that can be added into the experience. And, you know, building upon that and going into fandom and trying to understand the different ways that communities behave with each other. So not only creating that personalized experience, I'm a Steelers fan, great. But who are other Steelers fans that are on the platform at the same time? What might we want to share with each other? Or how might we want to set ourselves up against, you know, the the dreaded Ravens fans, as it might be. And so there's a lot of things you can do on both sort of the personalization scale, but also on the community scale. And we're looking more and more how to build that fandom as part of the platform experience.

The Future Of Regional Sports Networks

Tim Rowe, Host at State of Streaming 20:25

That's really interesting. Love to get your outlook on a little bit of the future, and we'll bring it back into the station with some recent news, but you just got me thinking here about the current state of RSNs and what the future of a regional sports network looks like. Do you have do you have thoughts?

Joe Franzetta, Head of Sports, Roku 20:42

I do a lot of thoughts. I mean, we could do a separate pod on that. Yeah, I mean, obviously, the the regional sports network business was constructed around and and really built for cable television model. And it worked incredibly well for that. We know that regional sports continue to be and are extremely valuable, extremely powerful. I think, you know, you talk to some of the leagues that are more active in the regional sports arena, and they point out the increased watch time and engagement that you get from regional sports. Now, of course, it's regional by definition. So there are challenges with the distribution model of that, and how do you get that to a local audience? In the streaming world, there's a lot of different ways to do that. And I think that some of it is, you know, subscription-based models where it's within a specific direct consumer app or it's within a what we call premium subscriptions, but it's sort of an ingest model type of app scenario. But you can also put some content for free in front of the paywall. So for instance, you unlock a game on a fast channel like the Roku Sports channel. Roku Sports channel is our 24-7 owned and operated Fast Channel, where we have things like the Savannah Bananas and our X Games partnership and our new NWSL partnership. But you could unlock a game on a fast channel in a regional market and have a click to subscribe type of interactive experience within that live game so that, hey, you're watching this live game, it's for free. You want to go subscribe to the package and be able to watch this all the time. We can allow you to use your remote control to click directly into that app and to subscribe to whether it's a direct to consumer app or it's within a standalone service of some sort. I think there's a lot to be done. And obviously the world is evolving quickly. You know, NHL is doing a lot, NBA is doing a lot, MLB is doing a lot, and there's a lot of different flavors, and I think there's some experimentation for. What works as things move to a combination of over-the-air plus direct to consumer. MVPD is still involved to some extent, but a lot of opportunity for services like ours. We're the distribution platform, so we're going to be a part of any solution. We have some solutions that we, you know, are particularly interested in and that we think will help benefit the overall ecosystem by driving subscriptions and driving engagement and driving ad sales. But at the end of the day, all of them exist on our platform. So we're here to help all of our distribution partners as the world migrates and specifically regional sports networks migrate into a digital world.

World Cup Learnings And International Growth

Tim Rowe, Host at State of Streaming 23:24

And thinking about the world more broadly, earlier this year, earlier this summer, rather, you had the World Cup Sports Zone. And this absolutely jumped out to me. The insane amount of consumption outside of the United States. Again, we could have another conversation on RSNs. We could probably do a whole special on international. Roku is much bigger than just the U.S. footprint.

Joe Franzetta, Head of Sports, Roku 23:48

Absolutely. And we we've had the sports zone in the United States for four years now. And we've more recently now started launching that sort of same playbook in other territories. The World Cup, we had dedicated destinations in seven different territories, I believe. And I probably it's uh US, Canada, Mexico, Colombia, Argentina, Brazil, UK, I think we got them. Hopefully I didn't miss hopefully I didn't miss anything. And I've always said that there's no better way to come into a new territory than on the shoulders of the most favorite local sport, whatever that might be. And if you can figure out a way to make sports viewing consumption in a local market as frictionless as possible for fans, you're going to find some very dedicated and loyal customers as you move forward. So it's a similar playbook in every territory. It's just different partners, right? It's different people have the rights. There are different sports that are more popular. You know, I think the World Cup was a particularly good example or a great example of how it's no longer and it hasn't been niche for a long time. So that's the wrong word, but it has really become a standard way of viewing content. The amount of World Cup viewing that occurred on streaming platforms was incredible. And, you know, Roku, I think Nielsen reported that we were the we had the platform with the most streaming engagement during the World Cup in the US. So we're extremely proud of that. We're extremely proud of the fact that we drove results for our partners for Fox One and Peacock, which are hundreds of thousands of subscriptions into those services through the destinations on our platform, through our platform itself. And so, you know, we just see the opportunity that exists in the US is an opportunity that exists outside the U.S. And we, you know, frankly, it will be a big driver for how we envision, you know, continued growth internationally.

Closing Thoughts And Listener Share

Tim Rowe, Host at State of Streaming 25:49

Amazing. Joe, normally, this is where I ask you to give the listeners the lat and long on where to stay up to date on Roku sports, but I'm gonna tell them it's state of streaming. They need to stay subscribed to state of streaming, to stay up to speed on all things Roku Sports. We'll be sure to share all of the exciting news and announcements that that you and the team are working on. I'm sure there's a part two in this conversation, too.

Joe Franzetta, Head of Sports, Roku 26:13

Yeah, I appreciate your time. Thanks, Dim.

Tim Rowe, Host at State of Streaming 26:15

It's been a pleasure. If you found this to be helpful, please share with a colleague or a client and start a conversation yourself today. And we'll see y'all next time.