Rumors abound that Netflix will buy Roku
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- Netflix Buying Roku? Tech World Loves the Idea, Wall Street Says It's Looney Tunes
- Tony Maglio, Chris Lindahl
- Jun 10 2022
- Word count
- 1052 words
If Netflix does buy Roku for billions of dollars, that would be pretty ironic since Roku originally started out as a project within Netflix that was spun out into its own company.
What does Netflix gain from buying Roku? What does Roku lose out on by selling to Netflix? I know Netflix was looking into advertisement tech, but buying up Roku to have some Netflix Originals filter down to Roku and be able to put ads on it and vice versa seems to be a touch convoluted, but maybe I'm not an ad executive.
For one, safety. The platform owners - Roku, Apple, Amazon, Google, Samsung and LG to some extent have started flexing their muscles (see the spat between Roku and YoutubeTV). If users can’t watch your streaming site on their default tv box, with such a competitive market for streaming sites, they’re liable to just go somewhere that does work.
Roku is one of the big, big players in the space. They’re also small enough to buy (you’ll have pry Amazon Fire from Bezos cold, dead hands).
This if nothing else prevents Roku from playing hardball with Netflix and gives them more leverage when other hardware makers try to play hardball with them.
I agree. Netflix gets a guaranteed hardware partner (Roku has sticks and TVs, although the latter is technically a Roku TV OS). They get advertising tech, experience, and revenue (from their competitors no less), and can "save" the Netflix brand that many are opposed to having ads at all (or are confused by it), by simply putting Netflix titles on the already ad supported Roku channel.
I'm sure the price for being one of the buttons on the Roku remote and the advertising kickback is negotiated with each individual company, so Netflix will also save money there by getting a much better deal.
In addition, controlling the platform gives Netflix at least the theoretical ability to gather data on what’s being watched in their competitors’ apps. I’m not sure how much they’re legally able to exploit it, but it’s certainly not unheard of for platforms and marketplaces to monitor and undercut successful distributors that make use of them - Amazon Basics being a prime (lol) example in a different vertical.
Netflix gains ownership of a popular smart TV/set top box platform, and all the user data collected by it. They would also skim a little off the top of every non-Netflix subscription purchased through Roku.
Roku's founders get to cash out.