How to Build a $22B Home Screen with Roku VP of Viewer Product, Preston Smalley

Welcome And What’s Ahead

Tim Rowe, Host, State of Streaming Podcast 0:00

Welcome back to the Stave Streaming Podcast. I'm your host, Tim Rowe, and today I'm sitting down with Roku VP of Product Experience, Preston Smalley. We discussed the launch of the first new Roku home screen in a decade, and we get into the weeds on things like personalization at scale, sports as a discovery and fragmentation problem, and we talk about Delight as a measurable brand asset, how Roku monetizes the fictional world of Roku City through IP partnerships in a way users don't see as advertising. This whole conversation is fascinating. Preston reveals that delight insight towards the end. So really encourage you to listen to the entire thing, find out how Roku rolls out a new home screen to 100 million households, how they're using the hub methodology as a mechanism for bringing multiple types of content into one destination. So whether you're a Roku user, a streaming pro, or you're just generally curious about what it all means for you as an advertiser, this is the conversation for you. Enjoy.

Building One Screen For Everyone

Tim Rowe, Host, State of Streaming Podcast 1:10

Preston Smalley, thank you for joining us on the eve of a very exciting milestone for Roku, the first new home screen release in a decade. Congratulations. Thanks, yeah. You're welcome. And this has been covered really extensively. We were just chatting there in the lead up about something that I have in the line of questions, I think maybe would be a good place for us to start, which is how do you create a unique experience across a universe of a hundred million plus households? There's so many different people, different experiences, probably infinite variations that all of this could come together. How do you start to approach a challenge like that?

Preston Smalley, VP of Viewer Product 1:51

Wow. Yeah. No, it is it's quite a challenge and I think quite a responsibility when you think about it. You know, in the US, that that uh hundred million global household figure represents half of all broadband households. And so it's something that customers rely on every day. They're coming, they're using this product, they're using it for many hours on end. And and I think it it really for us starts with understanding the streamer. So we did quite a bit of research in terms of we talked to hundreds of customers, we surveyed thousands of customers, and we really tried to understand what they use their Roku for and how did how was that working for them and what were some of the unmet needs they might have had. You know, as we did that, we talked to young people, old people, we talked to people in the US, outside, we were down in Brazil and different places. And so I think all of that we recognized that some people were new to streaming, some people had figured it all out, they had certain ways they did things. But what we found is that people really appreciated the simplicity that that Roku brought. They found it really easy to use, easy to get into the apps that they were familiar with, but they also struggled with you know what what it was to find a new show or to discover something that they wanted to watch. And so they wanted more help. And and so as we were approaching that, we wanted to make sure we did that in in a way that maintained both things, right? And I think when when you do that, you've got to personalize it to what they're looking for. So we have lots of signals we'll use, you know, what apps you use, what you search for. And we use all of that together. We've added some things too that help people kind of nudge us in the right direction. So we added like a thumbs up, thumbs down feature this last year with the redesign. If we don't get something right, you can add it manually. So if we we have a quick access section, you can add apps into that, or if you want to remove one of those, you can. And then, you know, I think as we deploy this out to customers, we went through several phases of okay, first you were opt in, then we let people opt out. And now we're at the stage where you can personalize it in those ways I just mentioned, but you can also customize it further. So if you want to hide a certain section, like the recommendations, or you want to pull your manual apps forward, you can hide quick access and you can put that up on top if you're one of those people that want to manually put all your apps around. We found a lot of people appreciate us doing it on their behalf, but recognize that you know, just because that works great for most people doesn't mean it works for everybody. And so I think it's trying to give that flexibility because it's just not a one-size-fits-all solution. And we had a stat that said there's like a billion combinations of mind screens that people have, right? Or that could be possible. And uh, that's what we're working with.

What Personalization Really Means

Tim Rowe, Host, State of Streaming Podcast 4:42

Awesome. And a stat that stood out to me was the 82%, eight out of 10 users looking for a personalized experience. Can you maybe define for us broadly what does personalization mean? Does it mean just that? Does it mean the ability to customize and mix and match those pieces? Is it discoverability of new content and using signals to understand what might be interesting to keep a user engaged and retain that person? How do you how do you think about personalization and maybe what those signals are for creating a personalized experience?

Preston Smalley, VP of Viewer Product 5:19

Yeah, I mean, that stat is really interesting because it's it's effectively 82% of people want us to read their mind and either the show they're already wanting to go watch because it's in their head they want to get back to it, or that we're gonna just pick. And so I think it's it's a tall order, but it's all of those things. It's it is the familiar. So it's how do I jump back into the shows I already like or finish the movie I maybe didn't get to last night? But it's also figuring out ways to move them into adjacent shows that may be similar to the ones they've watched. It also means talking about what's happening in the world, right? And so we have a feature that taps into the zeitgeist of what's trending and really looks at what are people searching for? What is trending right now? What are people talking about on LLMs and on the break the butter internet? And so we bring all that together along with human curators. So I think we've got a human merchandising team where they're looking at what might be trending. And so it kind of brings all that together to say, okay, here's some familiar things you might want to watch, but also here's some other things that may take you in another direction, but you might enjoy. And so it's it's really trying to bring both those things together is how you're gonna get it right for more people more of the time. And then you you want to you wanna use the signal so they can they, you know, we'll look at what they end up engaging with, what they don't engage with. And, you know, if they want a thumbs up, thumbs down our recommendations, we'll take

AI For Discovery And Roku Voice

Preston Smalley, VP of Viewer Product 6:46

that too.

Tim Rowe, Host, State of Streaming Podcast 6:46

What role does AI play? AI is everyone's favorite buzzword this year. What does it mean in application here?

Preston Smalley, VP of Viewer Product 6:55

Yeah, I mean, we've been, if you look at it, we've been applying some version of uh this personalization capabilities and AI for a number of years in an applied sense. So we we look at how do we learn from various patterns and build models around that that are really specific around TV and streaming. What's changed now over the last year is we've, with the advent of some of these generalized large language models, we can also augment what we've already built, but do it in a very like tailored way for TV streaming. And so those general models, they understand kind of what's happening in the world really well and what's what's happening on the internet, but not necessarily the structure of television and where to watch something and what episode just dropped and all of those things. And so that's where we're trying to bring that together in a way that I think is pretty unique and special and is tailored toward the streaming experience. So that's how we apply it in general like discovery realm. But then we've also earlier this year launched a voice feature where you can chat with your Roku and you can ask, hey, how is this how's this movie? Is it good for kids, or is it scary, or how funny is it, or did it win any awards? And so we're using some of those outside sources to help better tailor those questions. But again, do it in a way that that streaming is just a click away and it's super easy and simple.

Research Surprises And New Destinations

Tim Rowe, Host, State of Streaming Podcast 8:23

And you must see so many interesting insights about what users are doing and how they're using these different features. Are there any cool any cool insights that you can tease out any any any favorites of yours?

Preston Smalley, VP of Viewer Product 8:35

Yeah, I mean, I think part of this is some of the insights is how does it change over time for people? So when we did some of this research, we did what's called a diary study where we gave an early version of this home screen to a set of people. We said, hey, live with it, use it, and then we're gonna check in with you each day, each week, and tell us what your thoughts were. And I remember one of the researchers was talking to to one of these people, and and they're like, Oh my gosh, I I hate this quick access thing at the top. Like it doesn't make any sense. Where are my where's my regular apps where this quick access had automatically pulled together all of their apps and services that they like to use? And the researcher said, Okay, well, hold on, like just live with it for a week. Let's see how it goes, and we'll check in with you. And so that happened, that transpired. And when they check back in with the person, they're like, Oh, it really fit into my habit. It was so much easier. I didn't have to scroll as far to find my apps. It naturally figured out what you know, what I wanted to do. And so it just showed how like sometimes that first impression isn't necessarily where you're gonna land. And it's a matter of it is a tool, it's a it's something that's in your life. It's kind of like getting a new car, right? Like in your downs, how do I turn the radio and the air conditioning on and show why it's the first time it rains?

Tim Rowe, Host, State of Streaming Podcast 9:51

Well, oh my gosh, where is it?

Preston Smalley, VP of Viewer Product 9:53

Exactly. And so it's kind of like that. And so even if you put it in a place that maybe makes more sense and and is a little easier, there's still a transition. So I think that's that's been interesting. And then I think I think the other thing is just recognizing that people they kind of approach content in different ways. So some people they have several streaming subscription services they like to use. And so we introduced a subscriptions destination that really resonated with those people. They're like, okay, great. Talk to us about that. Yeah. So that one was like, it's just a place that's got your subscriptions. And so maybe you've got three or four, here they are. Here's what's going on in those services, new shows that are dropping, new episodes. And that's really preferred. But then other people want to mix and they want to see, okay, well, I want to see some free content that maybe ad supported that Roku's bringing. And I want to see that mixed in. And so we have a section called for you that that is really everything inclusive in that space, including everything you've saved, all your continued watching that you can pick back up on. And so it's interesting, these different destinations resonate in different ways. And it it really comes down to like the different kinds of streamers that you have and and recognizing that not everybody watches TV the same way, not everybody has the same expectations. And so you have to meet people where they are in these in these different ways.

Sports Hubs And The Fragmentation Fix

Tim Rowe, Host, State of Streaming Podcast 11:13

Hitting on those destinations for a moment, the sports hubs, the hubs in general have been really successful. Roku just announced the NHL hub is live, obviously. Perfect timing with the Stanley Cup. Can you can you talk to us about the hub methodology? What what's it's a curation concept, but but for folks that maybe aren't familiar, talk to us about hubs. For sure.

Preston Smalley, VP of Viewer Product 11:38

So, what what we recognize is that people, especially in sports, sports are incredibly fragmented. You know, where are you gonna watch? You know, just and and frankly, with streaming, it's it's actually gotten a bit worse, you know. At least you used to be able to go to go through a few channels and you could find it, right?

Tim Rowe, Host, State of Streaming Podcast 11:54

Supposed to make it easy, yes.

Preston Smalley, VP of Viewer Product 11:56

Well, it it's and it's it's great in that with streaming now, everything is available to stream. So you can stream any sporting event, which is terrific. And what we realized is that the fan needed a place that brought it all together. You say, Well, I care about you mentioned the NHL, which we just launched as a partnership with them. I care about the NHL, I want to get there. We recently introduced uh the National Women's Soccer League, and I want to go there. Okay, so it's figuring out how do I get to the game. Maybe I follow a particular team, I want to see that, or I, you know, and we'll bring forward local teams, for instance, if we know where you're at, and and then tell you, okay, here's here's the app you can stream it on. And if you don't have it, we'll help you figure out how to get subscribed if that's what you want to do. And I think what we found is with the partnerships of the leagues, it's a great combo because the leagues are facing the same challenge. They want people to find their property, right? They want to expand their audience. And so in partnership, they work with us, and then often we're getting great content from them. So even if you don't have all the services you need to watch the games, they'll have clips or highlights or things that you can follow and watch for free as part of these zones. So we're pretty thrilled about that. And I think with the NHL now, we cover all four of the major sports leagues, and then we've started to expand in these other areas like the National Women's Soccer League. And then for World Club, we've got great plans too. So I think as that's uh gearing up, we're excited to have something in place, you know, for our for soccer fans

Olympics Lessons And World Cup Plans

Preston Smalley, VP of Viewer Product 13:24

there.

Tim Rowe, Host, State of Streaming Podcast 13:24

78 Super Bowls in the course of a month. What do you have planned for the World Cup?

Preston Smalley, VP of Viewer Product 13:29

Well, I think it's it's in some ways, it's based on uh what we've learned on all these other major sporting events. Like we we have a terrific partnership with NBC around around the Olympics, and what we were able to deliver in the Olympics, it's amazing, even though it was the the winter games, we were able to actually outperform some of our summer games metrics. And I think it's it's really starting to understand how do you bring these things together? These are for big cultural moments in society. So it's putting it on the home screen, making sure they understand when the big events are happening, being able to have the recaps and highlights. In the Olympics case, we had a medal count, right? Okay, what what medal, how many medals did each have? I think with World Cup, it's trying to understand where we're at in the bracket, right? So we'll have more to share on World Cup. I think what's exciting is we're gonna be with you and helping fans through these different events. And there's not gonna, you know, there's not gonna be one we're gonna miss.

Tim Rowe, Host, State of Streaming Podcast 14:21

The entire world is excited about it. Can you give us any insights about Roku maybe more

Roku’s Global Growth And Free TV

Tim Rowe, Host, State of Streaming Podcast 14:28

globally? I know the the Mexico footprint especially is very strong. Anything that you can share about the the global Roku business?

Preston Smalley, VP of Viewer Product 14:37

We're doing well very globally. So I think from a sales perspective, you know, we're we're number one here in not just the US, but in Mexico and in Canada. And we're doing quite well as we scale there down in Brazil. And I think what what we found is that the Roku experience really fits the needs of these viewers, that there's definitely a value orientation as you look south. And so they're looking at how do I find more free content? How do I get more value out of what I'm I'm trying to watch? Live TV is incredibly important. And so when it comes to like the Roku channel and us offering free live channels, that's been very relevant. And we've seen that take off down in Brazil. So these are areas where it was very important. The first zones we launched were those those soccer or football zones down in in Mexico and Brazil. And so those are doing quite well. And I think it's it's helping people find those games and and the services they need to watch them. And I think those since some of those markets, they're maybe not as mature on the streaming migration, and we're helping that, you know, that audience through that, right? Uh you actually are a little further ahead on some of those, but I think as we get into those markets, it's people moving from antennas even into the streaming world. And so that's where taking our guide as an example, it blends antenna-based content that you might have connected to your TV with streaming content. And so you don't have to go cold turkey between one or the other. We're actually blending it together. And so you can you can watch it all, and including on the sports front. So, you know, maybe you watch the game, maybe one of the games is over an antenna feed that you might have, but then another you get through streaming. And so it's it's really trying to help customers with where they're at on their journey. And and again, that gets to people are different, and and they don't necessarily all approach this in the same

Measuring Delight Through Roku City

Preston Smalley, VP of Viewer Product 16:28

way.

Tim Rowe, Host, State of Streaming Podcast 16:28

Something, Preston, that I think Roku has done especially well is is delight viewers over the over the streaming experience. Roku City is something that I think about, right? We don't we don't mind when our screen goes to sleep because we've got this great scrolling experience across our screens. Roku's thinking about those little details. Is there anything that you can talk to us about on the the customer delight side? What should we expect there?

Preston Smalley, VP of Viewer Product 16:55

Sure. It's it's something that really makes Roku special. You know, I think this fictional world that that is where all of your all of your shows and characters and and they all live in this in this world, this city. And it's interesting how fans have taken to it. You know, I think there's there's people that want to get married in Roku City. Um we've hosted live events, you know, in Roku City and streamed concerts there. And so I think it's it's been really fun. And I think what what we've been doing is just leaning into it. So I think with this new home screen, we've now got a dedicated tile to Roku City where you can go into an interactive space where yes, you can you can even launch the screensaver right away if you don't want to wait 10 minutes. But we've also started to put those extensions there. So if we do if we do any live events in Roku City, you can you can play them there. Or we introduced this uh trivia game called Roku. Roku, sure. And it it helps you and it you go through latest events and and see how how much you're you're plugged into the to pop culture. We've introduced this little flying spaceship game called Roku Dash, where you have to go fly it up and down using just just your remote control and try not to crash into the city, you know, buildings and all that. It's it's some fun things, and I think you'll see us do even more with Roku City. It's gonna be a bigger part of uh everything that we do. And and believe it or not, we we measure delight too. So we'll ask customers in our research, we'll actually ask them, like, hey, have you been delighted, you know, recently on Roku, or we'll look for certain adjectives that we associate with delight. We found that Roku City is a big source of that, and what we do with some of the themes and the backgrounds and the and the whole world. And then the other way we delight people is if we get you to find a new show that you didn't know you liked. Those are kind of the two main ways that uh people are a little bit surprised by Roku, and and we think it it builds loyalty and uh love for the brand.

Tim Rowe, Host, State of Streaming Podcast 18:51

It's very cool. And I think I've noticed a few different, a few additions or a few modifications to Roku City. I think there's a gas station now. Is there a mobile gas station? I think there's some there's some development underway in Roku City.

Preston Smalley, VP of Viewer Product 19:05

It's it there's a lot of construction in Roku City, and and so it's an area where you'll you'll always see buildings be popping up. We've now started adding whole neighborhoods that we'll do. And this is this is an area where we do partner you know with outside IP holders and advertisers, but people don't see it as as sort of advertising because it's the way we do it, it's brought to life in in just a fun, a fun way.

What Preston Watches And Closing

Tim Rowe, Host, State of Streaming Podcast 19:30

Very fun. Speaking of, do you have any streaming recommendations for us? What are you watching right now?

Preston Smalley, VP of Viewer Product 19:35

I mean, right now, one of my favorite shows is this uh friends and neighbors on Apple TV. Okay. And I think it's uh it's just kind of like the craziness of of how the other side of how the rich live in society and uh the main character ends up stealing stuff from people's houses. But it's interesting how it connects, you know, how you how we use things like that to connect to other shows too, in terms of like how do you how do you branch people into other shows that you might like, you know, like I like Succession on HBO, and that kind of was about some of the same thing about wealth and power. Interesting. How do you connect these into different shows is something I I find interesting, but uh that one really surprised me.

Tim Rowe, Host, State of Streaming Podcast 20:17

And then tying it all back to a great home screen experience that knows what we want to watch next.

Preston Smalley, VP of Viewer Product 20:23

That's it. I mean, it's like we're that's the holy grail. We want to know what what you want to watch next. And the more we learn about you, you know, I think the better we're gonna be able to do that and and really help you find, help you keep you watching the shows you love, but also be that friend that that's always on the cusp of the next show that you guys should watch.

Tim Rowe, Host, State of Streaming Podcast 20:41

Beautiful. Preston, I can't thank you enough for being here. All right, thanks so much. If you found this conversation to be helpful, please share it with a colleague or a client, and we'll see you all next time.