Last Monday, Fox announced its $22B purchase of Roku, the free streaming service that comes bundled with the operating system of many smart TVs. Fox currently owns a sizeable number of linear TV channels featuring news, sports and business programming as well as Tubi, another free, ad-supported streaming service. In their announcement, Fox emphasized Roku’s capability as a technology platform that could be used to distribute a wide variety of content for which Fox holds the rights. Forrester Vice President and Research Director Mike Proulx, explained that the Roku play allows Fox to own “the platform, the data, and the ad stack,”, which is essential for the success and profitability of a free, ad-supported streaming service. While this investment will add sizeable debt to Fox’s balance sheet, the company is much less leveraged than other major media players such as Paramount. The number of subscribers for Roku and Tubi combined is larger than the paying subscribers to Disney+, Hulu and ESPN. The Roku+Tubi combination could also help Fox complete to secure distribution rights for premium sports networks.
