US media conglomerate Fox has announced its intention to acquire streaming technology company Roku in a deal valued at $22 billion, equivalent to approximately £16 billion. The acquisition, comprising both cash and stock, is seen as a significant strategic move by Fox to solidify its position in the rapidly evolving digital media landscape as consumer viewing habits continue to shift away from traditional linear television towards online streaming platforms.
Lachlan Murdoch, Fox's chief executive, described the acquisition as a "defining moment" for the company, highlighting a strategy that has been in development for nearly a decade. Fox's previous ventures into streaming include the acquisition of Tubi in 2020, which has since grown substantially. The current deal aims to integrate Fox's valuable portfolio of live news and sports content with Roku's preeminent streaming platform, which is a dominant force in the US smart TV market.
Roku currently powers streaming on over a quarter of internet-connected devices in the US, according to research from Park Associates, and boasts more than 100 million households streaming globally. Its main competitors in the platform space include Amazon's Fire TV, Google TV, Chromecast, Apple TV, and Tizen. Under the terms of the takeover, Roku's own streaming service, The Roku Channel, will merge with Fox's Tubi, creating a combined offering poised to rival established giants like Netflix and Amazon in the US streaming service market.
The timing of this merger coincides with a notable increase in advertising expenditure on streaming platforms. Consultancy firm Madison and Wall predicts that streaming advertising spend will reach $20 billion by 2029, nearing the levels anticipated for traditional television advertising. The enhanced scale and reach of the combined Fox-Roku entity are expected to provide a strong competitive edge in attracting a larger share of this growing advertising revenue.
While acknowledging the widespread shift towards on-demand streaming for general entertainment, Fox emphasised the "enduring primacy of live sports and news." This highlights a core belief that these types of content continue to drive significant live viewership and engagement, making their integration with a robust streaming platform a crucial element of future media strategy.