Netflix recently stated that it was considering establishing an ad-supported subscription service. Last month, sources claimed the corporation hoped to introduce the new tier in the fourth quarter of the current year. Roku’s addition to its portfolio would undoubtedly aid in this attempt since the business has developed a sophisticated video advertising platform to complement its hardware.
Roku’s price has dropped roughly 80% since last July, which might work to Netflix’s advantage. Meanwhile, Netflix has been coping with its own problems, including a first-quarter loss of members in a decade, sliding stock value, password sharing, and waves of layoffs.
The irony of the issue is that Roku and Netflix have a long history together. Anthony Wood, the creator, and CEO of Roku built a set-top box that Netflix planned to market in the late 2000s. Netflix CEO Reed Hastings had a change of heart only weeks before the debut, canceled the initiative, and spun the company off.
As the tide rises on advertising video on demand (AVOD) and free ad-supported TV (FAST) models, some experts view a Netflix-Roku partnership as a perfect answer. “Netflix buying Roku makes sense because it will give Netflix another revenue stream in a growing area of streaming,” says Nicole Sangari, vice-president of Kantar’s Worldpanel Division’s entertainment on-demand division. “We know that its [ad-supported TV] that’s now driving most of the growth in streaming.”
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