Customers of Roku, the streaming platform that reaches more than 100 million households around the world, woke up to news Monday morning that TV and streaming giant Fox has agreed to buy Roku at a valuation of $22 billion.
The announcement will likely have implications for Roku customers who use the company’s devices to access their streaming services and any streaming subscriptions they purchased through their Roku account. Fox also owns Tubi, a free on-demand video streaming service.
In an earnings call with investors Monday, Fox CEO Lachlan Murdoch affirmed that his company has no plans to combine Roku and Tubi, noting that the two platforms are “incredibly complementary.”
“Our expectation is fully to keep the services separate,” he said. “They serve consumers and our viewers in different ways”
If Fox decides to merge the two streaming services, there likely will be a price increase, a Barron’s article from March pointed out.
Citing Alex Holtz, research director at AI firm IDC, Barron’s said that price increases usually follow a consolidation of two streaming services into one.
Disney did so in October after it brought Hulu into Disney+. Prices rose from $9.99 to $11.99 for customers who subscribed to Disney+ only, and from $15.99 to $18.99 for ad-free Disney+ Premium. Hulu’s standalone plan rose from $9.99 to $11.99.
Aside from purchasing a TV with Roku pre-installed or buying a Roku streaming stick, customers can use Roku for free.
The platform allows users to sign up and pay for subscriptions to streaming services through Roku. It does not charge a monthly subscription fee – it merely allows customers to access their favorite streaming services through Roku’s user-friendly home screen.
And, recently, that platform made more than 500 TV channels available to customers for free.
The acquisition comes amid a tumultuous time in the streaming industry. Paramount won its bid to buy Warner Bros, beating out a short-lived battle with Netflix. Consumers won when Paramount locked down the initial agreement with Warner Bros., according to a Yale University Q&A with Michael Nathanson, senior managing director at equity research firm MoffettNathanson.
“If Netflix had acquired Warners, over time, we’d likely see fewer films in theater[s], the film industry would’ve been hit harder, and Paramount would have been very weak,” MoffettNathanson Senior Managing Director Michael Nathanson said in his interview with Yale. “That would effectively have left a duopoly between Netflix and Disney Plus.”
Meanwhile, consumers are looking to their subscription services for savings as they negotiate inflation rates that are as high now as they’ve been in the past three years.
Some 40 percent of consumers have cut back on their streaming-service spending, a March report from Deloitte revealed.
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