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The Rundown: Roku reports advertising slowdown in the second quarter

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The Rundown: Roku reports advertising slowdown in the second quarter

Netflix isn’t the only streaming company to have experienced a slowdown in the second quarter of 2022. Roku has similarly seen a slowdown in its platform business, which encompasses its advertising business. 

“In Q2, there was a significant slowdown in TV advertising spend due to the macro-economic environment, which pressured our platform revenue growth,” read the opening line of Roku’s letter to shareholders published on July 28.

The key numbers:

  • $764 million in total revenue, up 18% year over year
  • $673 million in platform revenue, up 26% year over year
  • $91.2 million in player revenue, down 19% year over year
  • 63.1 million active accounts, up 14% year over year
  • 20.7 billion hours worth of video streamed through Roku, up 19% year over year
  • Average revenue per user of $44.10, up 21% year over year

Advertising slowdown

Roku did not put any numbers on its advertising slowdown, but the company did underline that advertising revenue grew by some percentage, just at a slower pace. It attributed the ebb to advertisers pulling money from the scatter market, i.e. the inventory available for purchase outside of annual upfront commitments. 

Platform revenue growth “was lower than expected as many marketers abruptly curtailed or paused advertising spend in the ad scatter market during the latter half of Q2,” the company stated in the shareholder letter.

During a call with reporters on Thursday afternoon, Roku chief financial officer Steve Louden said the scatter ad market pullback generally occurs “at the state of some kind of downturn.” Roku enables upfront advertisers to cancel their commitments to a greater degree than traditional TV networks by offering a two-day cancelation option. However, Roku vp of ad sales and strategy Alison Levin said during the call with reporters that Roku did not see upfront advertisers cancel their commitments in Q2 “at a rate any different than previous quarters” and attributed the slowdown to the “pullback in scatter.”

Upfront bright spot

Roku has signed upfront deals with all seven major agency holding companies and secured $1 billion in total commitments, the company announced in tandem with its earnings report. Of the advertisers that made upfront commitments to Roku this year, 25% did not sign upfront deals with the company last year. 

Asked what percentage of last year’s upfront advertisers did upfront deals with Roku this year, Levin did not directly answer the question, but said that “in key verticals,” Roku retained 100% of upfront advertisers from last year. She did not specify what those verticals were.

Hardware hardship

Roku’s declining hardware business isn’t helping the company deal with the advertising slowdown. The company has been dealing with supply chain issues affecting sales of its CTV devices and smart TVs that are powered by its CTV platform. 

In Q2, Roku’s U.S. hardware sales “were lower than Q2 2021,” per the shareholder letter. That decline in sales would mean that Roku is not adding as many people to its platform as in previous periods, though it still added 1.8 million active accounts in the quarter. 

With hardware sales struggling, Roku would appear to be pressed to get its existing user base to spend more time streaming movies, TV shows and videos on its platform in order to generate platform revenue, which would include advertising revenue. However, in Q2 the amount of time people spent streaming programming on Roku’s platform dipped by 1% from Q1 to 20.7 billion hours. That dip contrasts with streaming’s share of total TV watch time in the U.S., which increased in the period, reaching a record 34% share in June, according to Nielsen.

Murky outlook

Roku has withdrawn its revenue growth guidance for the full year of 2022 in light of the gloomy macroeconomic conditions. In other words: “There is too much macro uncertainty for us to provide a full year outlook,” Roku CEO Anthony Wood said during the company’s earnings call with analysts on Thursday.

Amid that uncertainty, Roku has slowed its pace of hiring “quite a bit” and has also looked to slow the growth of “non-head count costs,” Louden said during the call with reporters. He didn’t say what those costs were, but he later said that the company has been looking at the costs associated with its free, ad-supported streaming TV service The Roku Channel, which includes the money the company spends to license programming for the service as well as the money it spends to produce original shows and movies.

Roku did shed light on its expectations for the third quarter. They’re not great, though the company does expect total revenue to tick up by 3% year over year in Q3 to reach $700 million. 

Roku is expecting that “advertising spend, particularly in the scatter market, will continue to be negatively impacted. We also believe that consumer discretionary spend will continue to moderate, pressuring both Roku TV and Roku player sales,” its shareholder letter stated.

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FIFA 23 lets you turn off commentary pointing out how bad you are

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FIFA 23 lets you turn off commentary pointing out how bad you are
A player shouldering the ball



(Image credit: EA)

FIFA 23 might be the best game soccer game yet for terrible sports fans, as it lets you turn off commentary that criticizes your bad playing.

Now that the early access FIFA 23 release time has passed, EA Play and Xbox Game Pass Ultimate subscribers can hop into the game ahead of its full release. But as Eurogamer (opens in new tab) spotted, they’ll find a peculiar option waiting for them.

FIFA 23 includes a toggle to turn off ‘Critical Commentary’. The setting lets you silence all negative in-match comments made about your technique, so you can protect your precious ego even when you miss an open goal or commit an obvious foul. The more positive commentary won’t be affected. 

Spare your feelings

A player dribbling the ball in FIFA 23

(Image credit: EA)

The feature looks tailored toward children and new players, who don’t want to have their confidence wrecked within mere minutes of picking up the controller. But even experienced players who just so happen to be terrible at the game might benefit.

It’s not perfect, though. According to Eurogamer, the feature didn’t seem to work during a FIFA Ultimate Team Division Rivals match, with critical comments slipping through the filter. Still, who hasn’t benefited from a light grilling every now and then?

Polite commentary isn’t the only new addition in FIFA 23. It’s the first game in the series to include women’s club football teams, and fancy overhauled animations that take advantage of the PS5 and Xbox Series X|S’s new-gen hardware. EA will be hoping to end on a high, as FIFA 23 will be the last of its soccer games to release with the official FIFA licence.

If disabling critical commentary doesn’t improve your soccer skills, maybe building a squad of Marvel superheroes will. Although you might not do much better with Ted Lasso wandering the pitch.

FIFA 23 is set to fully release this Friday, September 30.

Callum is TechRadar Gaming’s News Writer. You’ll find him whipping up stories about all the latest happenings in the gaming world, as well as penning the odd feature and review. Before coming to TechRadar, he wrote freelance for various sites, including Clash, The Telegraph, and Gamesindustry.biz, and worked as a Staff Writer at Wargamer. Strategy games and RPGs are his bread and butter, but he’ll eat anything that spins a captivating narrative. He also loves tabletop games, and will happily chew your ear off about TTRPGs and board games. 

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Google Pixel 7 price leak suggests Google is totally out of touch

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Google Pixel 7 price leak suggests Google is totally out of touch
The backs of the Pixel 7 and the Pixel 7 Pro



(Image credit: Google)

We’re starting to hear more and more Google Pixel 7 leaks, with the launch of the phone just a week away, but tech fans might be getting a lot of déjà vu, with the leaks all listing near-identical specs to what we heard about the Pixel 6 a year ago.

It sounds like the new phones – a successor to the Pixel 6 Pro is also expected – could be very similar to their 2021 predecessors. And a new price leak has suggested that the phones’ costs could be the same too, as a Twitter user spotted the Pixel 7 briefly listed on Amazon (before being promptly taken down, of course).

Google pixel 7 on Amazon US. $599.99.It is still showing up in search cache but the listing gives an error if you click on it. We have the B0 number to keep track of though!#teampixel pic.twitter.com/w5Z09D28YESeptember 27, 2022

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According to these listings, the Pixel 7 will cost $599 while the Pixel 7 Pro will cost $899, both of which are identical to the Pixel 6 and Pixel 6 Pro starting prices. The leak doesn’t include any other region prices, but in the UK the current models cost £599 and £849, while in Australia they went for AU$999 and AU$1,299.

So it sounds like Google is planning on retaining the same prices for its new phones as it sold the old ones for, a move which doesn’t make much sense.


Analysis: same price, new world

Google’s choice to keep the same price points is a little curious when you consider that the specs leaks suggest these phones are virtually unchanged from their predecessors. You’re buying year-old tech for the same price as before.

Do bear in mind that the price of tech generally lowers over time, so you can readily pick up a cheaper Pixel 6 or 6 Pro right now, and after the launch of the new ones, the older models will very likely get even cheaper.

But there’s another key factor to consider in the price: $599 might be the same number in 2022 as it was in 2021, but with the changing global climate, like wars and flailing currencies and cost of living crises, it’s a very different amount of money.

Some people just won’t be willing to shell out the amount this year, that they may have been able to last year. But this speaks to a wider issue in consumer tech.

Google isn’t the only tech company to completely neglect the challenging global climate when pricing its gadgets: Samsung is still releasing super-pricey folding phones, and the iPhone 14 is, for some incomprehensible reason, even pricier than the iPhone 13 in some regions. 

Too few brands are actually catering to the tough economic times many are facing right now, with companies increasing the price of their premium offerings to counter rising costs, instead of just designing more affordable alternatives to flagships.

These high and rising prices suggest that companies are totally out of touch with their buyers, and don’t understand the economic hardship troubling many.

We’ll have to reach a breaking point sooner or later, either with brands finally clueing into the fact that they need to release cheaper phones, or with customers voting with their wallets by sticking to second-hand or refurbished devices. But until then, you can buy the best cheap phones to show that cost is important to you.

Tom’s role in the TechRadar team is to specialize in phones and tablets, but he also takes on other tech like electric scooters, smartwatches, fitness, mobile gaming and more. He is based in London, UK.

He graduated in American Literature and Creative Writing from the University of East Anglia. Prior to working in TechRadar freelanced in tech, gaming and entertainment, and also spent many years working as a mixologist. Outside of TechRadar he works in film as a screenwriter, director and producer.

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DisplayMate awards the “Best Smartphone Display” title to the iPhone 14 Pro Max

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DisplayMate awards the “Best Smartphone Display” title to the iPhone 14 Pro Max

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