Roku is dipping its toes in the paid streaming service space, but is entering within its own new niche.
On Aug. 5, the company announced the launch of an ad-free streaming service, Howdy, for $2.99 a month. This makes it the cheapest major, general entertainment ad-free streaming service, far below the costs of Netflix, at $18 a month, or Hulu at $19 a month.
At launch, it will offer close to 10,000 hours of content from Lionsgate, Warner Bros. Discovery and FilmRise, including Mad Max: Fury Road, The Blind Side, Weeds and Kids in the Hall, alongside select Roku Original titles. That said, Howdy’s content is unlikely to rival the breadth of titles and the new content offered on other services. But Roku isn’t aiming to compete with them.
“Priced at less than a cup of coffee, Howdy is ad-free and designed to complement, not compete with, premium services,” Roku founder and CEO Anthony Wood said in the Aug. 5 announcement of the new service.
The $2.99 monthly subscription comes at the right time, as the average price of ad-free plans has risen 23 percent in the past two years to $13.88, according to data firm Antenna’s year-end report on the subscription landscape. Even ad-supported plans come in at a higher cost, with the average price having risen 25 percent.
That means the service should appeal to those price conscious customers, as well as those who want to watch classic programming, but grow tired of advertising interruptions. According to market research firm Circana, among customers who cancel a streaming subscription, 24 percent do so because of the high cost. At the same time, 21 percent of individuals that are reducing their viewership or stopping their viewership of free, advertising-supported services are doing so because they say there are too many advertisements.
For Roku, analysts see the move as a healthy way for the company to continue diversifying its revenue away from advertising alone and better monetize the traffic that’s coming onto the platform. Roku reached more than 90 million streaming households as of January 2025. The new offering joins the platform’s Roku Channel, a free, ad-supported streaming platform that was the most popular FAST service in June, according to the Nielsen Gauge. Roku also acquired subscription streaming service Frndly, a $6.99 monthly service which offers 50 live TV channels as well as video content, in May.
Roku’s platform revenue, which includes advertising and subscription revenue, is already on a solid growth trajectory, with the company reporting revenue up 18 percent year-over-year in its most recent quarter due to the strong performance of video advertising and the acquisition of Frndly. The company included the launch of Howdy in its outlook, with platform revenue set to hit $4.075 billion, up 16 percent year-over-year. Roku is on track to be operating income positive in Q4 of 2025 and for full year 2026.
“By adding owned and operated subscription services, Roku has an increasing number of ways to monetize the traffic it directs from its home screen: drive users to The Roku Channel (which monetizes through advertising), drive to its subscription services, Frndly and Howdy, drive to third-party apps where it may or may not take a cut of ads and/or subscription fees and drive transactional pay-per-view,” Lightshed analysts Rich Greenfield, Brandon Ross and Mark Kelley said in an Aug. 5 note.
In adding Howdy into the company’s streaming services, John Buffone, vice president and media entertainment industry advisor at Circana, notes that Roku is “playing now in basically all the streaming areas.” Given the popularity of bundling among consumers, Buffone said he could also see Roku offering bundled packages of Howdy alongside Frndly, other streamers or in partnership with third-parties similar to how Walmart’s subscription service includes Paramount+.
“I think this gives them an opportunity to bundle with their company-owned services, with SVOD services that they carry on our operating system. And if they want to go beyond media, there should be a lot of activations available there as well,” Buffone said.
The app began automatically appearing on Roku homescreens Aug. 5, which already gives it a free, large reach, and the plan is to launch the service on mobile and other platforms in the future. The only downside for Roku with the service is not having the opportunity to place ads to direct consumers to their other services.
“Notably, Roku’s only cost to marketing Howdy is the opportunity cost of not marketing other content that might drive a consumer to watch ad-supported content on The Roku Channel,” the Lightshed analysts said.
