Due to the low sales of set-top boxes and low demand for streaming services, it seems another company has taken a hit after Netflix. Roku recently saw a huge dip in its stock value: It dropped about 80% since it’s high last July.
Now there are chatters among the company insiders that Netflix is buying Roku, the leading operating system for SMART TVs. Interestingly, Roku’s CEO Anthony Wood has a history with Netflix. Some 15 years ago Wood was helping the company to transition from physical DVDs and Blu-rays to having its own set-top boxes to stream content directly. However, the company decided to take a different approach: partnership with third-party set-top makers, and video game console companies. Wood then focused on building the TV streaming operating system Roku.
But will this team-up benefit the companies? Here’s what we think about the meet-cute.
The advantages of Netflix buying Roku
The streamer may benefit from Roku’s expertise in ads
The streamer just recently announced that it would launch a cheaper ad-supported model for its subscribers. However, it has zero experience in that. On the other hand, Roku has had ads on its platform for as long as we can remember. Thus, Netflix buying Roku may prove beneficial for the streamer after all.
Roku Originals will get a bigger audience on Netflix
Roku has about 61.3 million users in North America. While these numbers are good, the company couldn’t make a presence internationally. On the other hand, Netflix boasts 226.1 million global subscribers. So, with the help of the streamer, Roku can expand beyond the North American market. Additionally, Roku Originals will get a bigger exposure on Netflix.
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Where can it go all wrong?
Although the advantages to this acquisition outweigh the disadvantages, we still can’t help but consider other streaming services’ outlooks on this deal. Roku runs a number of apps on its platform and it has even revealed that it gets the most money from the smaller streaming apps. This acquisition will change everything, as these companies will start viewing Netflix-owned Roku as a competitor.
What do you think of this rumored acquisition? Do you think it will happen?
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