Roku just reported a strong holiday quarter, which doesn’t really come as a surprise: there’s no time of year when people buy more streaming boxes, sticks, or new TVs that happen to run Roku’s software. The company ended 2019 with 36.9 million active accounts, and customers streamed 11.7 billion hours of content in the fourth quarter.

“We have now entered the streaming decade when we believe consumers around the world will choose streaming as their primary way of viewing TV,” Roku CEO Anthony Wood wrote in his letter to investors. Roku believes that by 2024, half of all US households with a TV will have either cut the cord or never had cable to begin with.

During the earnings call, Roku CFO Steve Louden said the company’s hardware operations have “only experienced minor impacts” due to the coronavirus.

But the real story continues to be Roku’s thriving ad business. “Throughout 2019, our growth in monetizable video ad impressions significantly outpaced streaming hour growth,” Wood wrote, saying that Roku aims to “shape the future of OTT advertising.”

“In 2019, all top 10 technology and telecom advertisers, as well as all top 10 consumer packaged goods companies, spent with Roku,” Wood said in the letter. And Roku has been willing to exert its power in the streaming market to help bolster its ad numbers. This excellent report from The Information yesterday went over some of the friction that has developed between Roku and major entertainment businesses like Fox and NBC. Last month, Roku and Fox got into a brief-but-acrimonious public spat after the companies failed to come to terms on a new carriage agreement. The rift came just ahead of the Super Bowl, but both sides struck a new pact that kept Fox’s apps on Roku devices for the big game.

Without mentioning the Fox dust-up, Wood said that he watched Super Bowl LIV on a Roku. In 4K, naturally.

According to The Information, Comcast’s NBCUniversal found itself in a similar dispute with Roku in late 2018 and was preparing for the possibility of the banner NBC app and other NBCU networks like USA and Syfy being kicked off Roku’s platform. But that situation was resolved before anything went public.

Whenever it comes time to renew one of these deals, Roku uses the opportunity to continue growing out its advertising unit. And it has multiple ad strategies in play. You can’t miss the large ads on Roku’s home screen. That’s prime placement, and Roku noted in its earnings release today that Disney took advantage to promote the launch of Disney+. The company’s free-to-watch Roku Channel is also an important vehicle for ad revenue. But there’s a third pillar that’s just as important as those two: Roku also sells ads for third-party streaming apps. Per The Information:

It also sells some of the ad space on other companies’ apps. It does that by buying a portion of those apps’ ad inventory from the companies at a reduced rate, pooling the inventory with other inventory it has and re-selling it to advertisers.

Roku’s advertising business earns the company much more money than hardware sales of low-cost streaming players. But its ambitions to keep building upon that business have caused Roku to butt heads with some content providers. Smaller channels don’t really have much in the way of bargaining power; they can’t afford to lose Roku’s massive user base. But larger players can push back. According to The Information, Fox resisted Roku’s requests to provide programming for The Roku Channel when coming to the last-minute carriage renewal, and advertising terms fell short of what Roku had hoped for.

Roku still insists it’s a neutral party in the streaming wars

Despite the strained negotiations, Roku still positions itself as “a neutral partner at the center of the streaming ecosystem,” per the investor letter.

But the company sometimes even flexes its power with its own partners. Inside this report from Protocol chronicling TCL’s rise as a TV manufacturer is an interesting nugget: “TCL is said to have pushed for a change to the terms of the deal” with Roku, the report says. Margins on TV sales are razor thin, and Roku keeps all of the advertising and services revenue that come from Roku TVs to itself. TCL makes the well-reviewed hardware, but Roku controls the software, new features, and updates. It’s now even got a licensing program for companies that want to build soundbars and speakers for Roku TV sets.

In total, Roku customers streamed 40.3 billion hours of content in 2019. But sometimes new software features can actually work against that figure. Here’s what the company said as to why Q4 streaming growth seemed a little tame compared to 2018:

The year-over-year growth rate in streaming hours moderated somewhat in Q4 2019 versus Q4 2018 due in part to the timing of Black Friday falling a week later in 2019 and the partial rollout of the “Are you still watching” feature, which prompts users to confirm they are watching after a period of inactivity.

“While 2019 was a tipping point in commitments to streaming, the full force of change is still to come,” Wood wrote in the investor letter. “Roku is well positioned for the new streaming decade as we continue to differentiate our platform, deliver strong growth, execute our strategic plans and bring together even more consumers, TV brands, content providers and advertisers.”