Changes to payouts policy for annual subscriptions

Traditionally, Roku revenue payouts to developers from user subscriptions to channels have been paid out on a pro rata basis – 1/12 per month for an annual subscription – per Roku's option as stated in the Roku Distribution Agreement. Accordingly, developers are provided with a monthly Payout Audit Report that reflects the deferred prorated payments made that month. The developer can calculate from historical reports what has been paid and the balance of the deferred payout due still outstanding.

Beginning in October of 2021, Roku will change its method of payment to full payout for each paid subscription. From that point, and unless Roku makes eventual future changes, developers will receive full payment within the normal terms of the Roku Distribution Agreement (within 60 days from the end of the month in which Roku is paid).

For developers with a balance from previous subscriptions on their deferred payout account, the full balance will be paid out along with the regular monthly payout in November. All prorated payment amounts that would have been scheduled for future months will instead be accounted for in the Payout Audit Report of October 2021.  

The aims of this article are to:

• Notify developers of the upcoming changes
• Explain the one-time Advance payout
• Indicate how to reconcile the Payout Audit Reports reflecting these events.

Advance Payout

To transition from the previous deferred accounting system to the new full-payout system, a one-time payout will be made to developers with a balance on their deferred payout due. This payout is referred to here as an Advance on balances owed, because it is paid against amounts scheduled for future payment.

Example. The net total amount of a certain one-year subscription due to a developer is $120, paid $10 monthly for 12 months. The developer started receiving payouts of $10 from June 2021. By October 2021, the total payout has been $50. In the November 2021 payout, the developer will see an Advance payout of $70, comprising all of the remaining deferred funds owed.

Deferred entries

Under the prior system, after an annual subscription was purchased and paid for by a customer, deferred payout entries to the developer account would be scheduled by the Roku accounting system for all future prorated payouts. Thus, entries up to 12 months out would be pending in the Roku system, but would post only during the related future payout month. 

The new system provides full payout in a single month, so for new subscriptions the Payout Audit Report will show only a single payment transaction.   

Dates of Interest

Switchover date: October 1, 2021. Starting from this date, subscriptions to monetized channels will be paid out in a single transaction. The Roku accounting system will reflect a single event (instead of a series of pending monthly transaction events). Note that subscriptions after the switchover date will be paid per contractual terms.

Advance Payout date: November 2021. Developers of channels monetized prior to October 1 will receive a one-time Advance payment (included along with any other November payout due) that bundles all previously scheduled deferred monthly payments due into a single payment. This payout will occur on the same date, and will include any subscription amounts, that would normally have been paid in November. 

Payout amount to expect

On the Advance Payout date in November, developers can expect to receive a single payout that includes:

• The Advance amount – the sum total of any amounts that would have been marked as Deferred on the October 2021 through September 2022 Payout Audit Report statements
• The scheduled amount – the New subscription payout that is owed for that month.

On payout dates for subsequent months, developers can expect to receive the normal expected payout for New transactions. 

Reconciliation

The Payout reporting link generates a Payout Audit Report. The standard reconciliation procedure for the user of that report sums the Partner Rev Share column to return the total partner revenue, which would normally match the amount of the partner payout from Roku.

• The October report will include all Deferred entries that would have been posted month-by-month going forward under the previous system.
• Summing these Deferred amounts results in the Advance amount.
• This Advance amount will be included in the November payout.

No payments marked Deferred will show on the November Payout Audit Report or on subsequent reports.

Note that there will be a gap between the Sales Activity / Transaction Reporting reports and the Payout Audit Report. The latter will be inclusive of the one-time Advance payment.