How Google Could Change The Streaming Space With Kaleidoscope

The average American subscribes to three streaming services. Alphabet Inc GOOG wants to help steamers keep track of all their available television shows and movies. Recent testing by the company reveals that it may soon be competing with Roku Inc ROKU.

What Happened: Screenshots from the website Chrome Story showed off a new streaming platform from Google.

The screenshots appear to show that the company is quietly working on organizing streaming services for users and allowing search tools to see whether a particular show or movie is available to the consumer.

Consumers now have separate apps for all their paid and free streaming services. Google could be looking to combine all of them into one platform. The report also hints that Google may be working on integrating YouTube and Google Play Movies into the platform; both services are owned by the tech giant.

Fast Company highlights the fact that Microsoft MSFT tried a similar launch with the Xbox One in 2013. The company eventually abandoned the technology.

The Xbox One allowed customers to plug their Comcast/Xfinity cable box into the console in order to keep track of which cable channels a person subscribed to, as well as their streaming apps. 

Why It’s Important: Google could become an instant rival to Roku with this new platform. Roku now offers cross-app search functions.

Coverage of Roku shares was initiated by Citi last week with a Buy and $180 price target.  

A Citi analyst said Roku could grow from 43 million subscribers to 125 million, and revenue per Roku account could grow from $23 in 2019 to $32 in 2022.

A Roku account could be valued at $180 in 2022, up from $115 in 2019, according to Citi. 

With Google’s new platform, customers may not need to subscribe to Roku. Google has a huge user base with its Android phones, Google Chrome browser and YouTube video service.

Add all these numbers together and it could equal a nice initial user base for its Kaleidoscope platform.

Google could use the platform to further monetize its advertising business or use it to try and push YouTube and Google Play Movies.

The Streaming Market: The Hollywood Reporter said Americans spend $37 a month on their streaming subscriptions.

Deloitte research shows an average of three subscription services per user.

That's a huge increase from three years ago, when only 50% of people in the U.S. subscribed to one streaming service, most likely Netflix.

Netflix Inc NFLX has 61.3 million subscribers. Amazon.com, Inc. AMZN counts 42.2 million subscribers. Apple Inc.'s AAPL Apple TV+, one of the newest services, has 33.6 million subscribers.

Hulu has 31.8 million subscribers. Walt Disney Co's DIS Disney+, another newer streaming service, has 23.2 million subscribers.

AT&T's T HBO Max could have 43 million subscribers given the free subscription given to each existing HBO subscriber.

GOOG, GOOGL, ROKU Price Action: Alphabet Class A shares were down 0.6% at $1,629.53 at the close Monday. The stock is up 22% in 2020.

Earlier in August, GOOG shares hit a new all-time high of $1,659.22.

Roku shares are up 20% in 2020 and hit an all-time high of $177.54 earlier in August. The stock ended Monday's session higher by 0.36% at $173.48.