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Roku CEO plays down Apple, Amazon threat as it gears up for $1.3 billion IPO

  • Roku begins trading as a public company on the Nasdaq on Thursday
  • Roku set its IPO price at $14 per share giving video streaming device maker a $1.3 billion stock market value
  • Anthony Wood, CEO of Roku, said he isn't worried about competition from Apple and Amazon

Amazon and Apple are not a threat to streaming platform Roku, its CEO told CNBC as the company gears up to begin trading on the Nasdaq on Thursday.

Roku aggregates different streaming providers, such as Amazon Video and Netflix, in one platform. It sells hardware that can plug into a television or licenses its software that is built into sets.

But the company has heavyweight competitors. Apple TV, for example, also allows users to access other streaming services as does Amazon's Fire TV stick.

Anthony Wood played down the threat these tech giants posed, however.

"Roku's position in this ecosystem is being the platform that ties together the customers, the advertisers, the user, and we've been competing with big companies for a long time very successfully… we do it by winning customer reviews," Wood told CNBC in a TV interview Thursday.

"We have built a purpose-built operating system for TV, it is the best way to stream and that's how we get customers."

Anthony Wood
David Orrell | CNBC
Anthony Wood

But while many of these video services work together, their relationship is often fraught. When Apple launched a new TV app, Netflix was not originally included in it. And earlier this week, Google pulled its YouTube video service from Amazon's Echo Show device.

When asked if he feared a similar situation could happen with Roku, Wood said that it's large scale would make that unlikely.

"I don't know why they would do that. We are the largest platform for distributing content in the United States. If you want to reach the OTT (over-the-top) audience at scale you need to be on Roku," Wood said.

Over-the-top content refers to streamed content over the internet.

While Wood was optimistic that the company will be able to compete in the crowded market, Roku's initial public offering (IPO) prospectus recognizes the risks posed by the titans.

"These companies have the financial resources to subsidize the cost of their streaming devices in order to promote their other products and services making it harder for us to acquire new users and increase hours streamed. These companies could also implement standards or technology that are not compatible with our products or that provide a better streaming experience on competitive products," the prospectus said.

'Next generation' advertising

Roku is loss making but the company has been growing customers and revenue. It now has 15 million monthly active accounts and generated $199.7 million in revenue during the first six months of this year, a 23 percent jump from the same period of 2016.

The company set its IPO price at $14 per share, giving the video streaming device maker a $1.3 billion stock market value when it debuts Thursday.

Advertising makes up a large chunk of Roku's profit, and this is an area where Wood sees potential for the firm.

"Advertising is our bread and butter. As the world moves to streaming, that means all TV advertising is moving to streaming. There is a huge opportunity to become the next generation advanced TV ad platform," Wood told CNBC.