Fox is set to purchase Roku for $22 billion, creating a significant player in the US TV market as the company aims to enhance its streaming and news offerings.
Media conglomerate Fox has announced its intention to acquire the streaming platform Roku in a deal valued at $22 billion (£16 billion). This acquisition is expected to establish Fox as the third largest entity in the US television market by viewing share.
The decision to acquire Roku is perceived as a strategic move by Fox to integrate its streaming capabilities with its existing news and sports content, positioning itself favorably as more television audiences transition to online platforms.
Fox's offer includes $160 per share, comprising both cash and stock. Lachlan Murdoch, the chief executive of Fox, described the acquisition as a significant milestone for the company, indicating that it represents a natural progression of the focused strategy they have been implementing for nearly a decade.
"In 2019, we reoriented the company around live news and sports. In 2020, we acquired Tubi, and under our guidance, it has evolved into one of the most successful streaming businesses," Murdoch stated. He further emphasized that this acquisition will merge their extensive live content portfolio with the leading streaming platform that Americans utilize.
Roku is recognized as the largest streaming platform for smart TVs in the United States, operating on over 25% of internet-connected devices, as reported by research firm Park Associates. The company was among the pioneers in bringing streaming services to a broad audience in the US, offering access to popular applications like Netflix and Amazon Prime, in addition to its own channel.
Roku's devices allow users to download competing services alongside its proprietary offerings. Worldwide, more than 100 million households utilize Roku for streaming. Its primary competitors include Amazon's Fire TV, Google TV and Chromecast, Apple TV, and Tizen.
The Roku Channel, which features a variety of films, TV shows, and live news, is a key component of Roku's offerings. Following the acquisition, Roku's services will merge with Fox's streaming service, Tubi, aiming to position themselves against major players like Netflix and Amazon in the US streaming market.
Roku has also produced original content, including 'The Reunion: Laguna Beach,' a special revival of the MTV reality series that concluded in 2006, and 'Honest Renovations,' a home improvement show hosted by Jessica Alba and Lizzy Mathis.
This merger comes at a time when advertisers are increasingly investing in streaming platforms. The consultancy Madison and Wall predicts that spending on streaming advertising could reach $20 billion by 2029, which is only slightly less than what is expected for traditional television advertising.
Following the acquisition, the expanded scale of Fox and Roku is anticipated to enhance their ability to attract advertising dollars. In announcing the deal, Fox underscored the ongoing shift from scheduled television viewing to streaming services while reaffirming the importance of live sports and news.
