Roku Explores New Advertising Strategy for Devices Connected via HDMI

Roku is investigating a novel approach to expand its advertising capabilities beyond its native streaming platform. A recent patent filing, uncovered by Lowpass, indicates Roku’s interest in integrating advertisements into content from third-party devices—such as Apple TV, Chromecast, or PlayStation—connected to Roku TVs via HDMI.

Innovative Ad Placement During Pauses

The patent outlines several techniques Roku might use to detect paused content on a connected device, including recognizing pause signals from the remote control, identifying static images on the screen, or silent audio signals. The goal is to insert commercials during these paused moments without significantly disrupting the user experience—assuming the user is not actively watching or playing.

Ad Relevance and User Experience

Roku aims to ensure the ads displayed are relevant to what the user is consuming by employing automatic content recognition (ACR) technology to analyze frozen frames or metadata from the paused content. This could allow for targeted advertising based on the content or the type of third-party device being used.

Economic Rationale Behind the Move

This strategy could potentially open up a new revenue stream for Roku, which like many hardware manufacturers, faces financial pressures from hardware sales alone. For instance, Roku reported a $44 million loss from smart TV sales in the fiscal year 2023, while its ads and services division generated $1.6 billion in profit. The proposed ad system could help mitigate hardware losses and increase profitability.

Potential Consumer Reaction and Future Prospects

While the idea of ads during pauses might not appeal to all users, this patent reflects Roku’s efforts to innovate in the competitive streaming market. However, it is important to note that this is still just a patent. Roku might choose not to proceed with this feature depending on various factors, including consumer response and technical feasibility.