Nathanson believes that Roku player gross margins are "managed close to zero" to facilitate the growth of a platform that is generating cash through ad sales, subscription and transaction revenue sharing and the sale of premium subscription channels and software licensing deals. The challenge ahead for investors, he added, is determining where Roku's revenues are being sourced from and how sustainable its growth will be. Nathanson, who retained his "neutral" ranking on Roku despite the stock's rise since he initiated coverage last July, notes that Roku has benefited as one of the "best pure-play ways for investors to gain exposure to all-things streaming and the growth in AVOD." There's already ample evidence of Roku's desire to take more steps, including a job posting for a lead production attorney to help the company expand its slate of original fare, with a focus on original episodic and feature-length productions. This pivot will be expensive, filled with more execution risk and is not factored into our forecasts," Nathanson added. "The acquisition of Quibi's nascent library is the first step. "In order to better compete with a new crop of now fully-integrated AVOD competitors, we believe that Roku will have to 'ladder up' into original content (à la Netflix) and away from commoditized library content," Nathanson argued in a new report on the streaming giant, that begs the question: "Roku: Is It AOL or Is It Netflix?" Nathanson estimates that The Roku Channel may already contribute at least 65% of Roku's video ad revenues today.