Has Netflix set its sights on the Roku streaming platform?
According to Business Insider, Netflix is contemplating the acquisition of the popular Roku streaming platform as a way to launch a potential ad-supported strategy and win back lost subscribers.
Shares of streaming platform Roku jumped 11% on Wednesday on the wake of rumors of a possible acquisition from industry leader Netflix.
Business Insider reported that the Roku company has informed employees it has closed trading to allow its employees to sell their shares, a possible prelude to acquisition talks with Reed Hastings-led video streaming platform.
Video streaming platform company Roku started out in 2007 as a Netflix initiative called "Project Griffin" which eventually turned into its own company, which went public in 2017.
But now Roku employees speculate that their former parent company could become their new parent company.
Meanwhile, it's struggling as streaming competition heating up – shares plummeted last month after Netflix recorded its first subscriber loss in more than a decade. Not only that, CEO Reed Hastings warned investors that he could lose 2 million subscribers in the second quarter of the year.
According to Quartz , such a purchase would make a lot of sense: The Los Gatos-based company is changing its line of ads, and Roku has a built-in advertising process. Plus, Roku's built-in content hint system with Netflix would be a lot of fun.
All the details.
WHAT IS ROKU
On the one hand is Roku, a company that “has become a consumer darling with its simple, convenient and affordable devices and software that bring the entire universe of subscription-based, ad-supported OTT services to the living rooms,” says Forbes . This turned the company into North America's most popular streaming platform.
But the video streaming platform operator has experienced a severe stock slump in recent times.
BUSINESS INSIDER INDISCRIPTIONS
And on Wednesday, Insider revealed that some Roku employees speculate that Netflix could take advantage of the drop in Roku stock to buy the company.
Roku recently banned employees from trading its stock, according to the Insider report, a move that signals the possibility of an imminent acquisition. Roku staff reportedly see Netflix as the most likely candidate.
THE (WINNING) STRATEGY FOR NETFLIX?
On the other hand there is Netflix, the leading platform in the video streaming sector.
But now Netflix needs to reassure the markets that it still has a plan to win the streaming wars.
Netflix's decade of continued growth came to a halt in the first quarter of 2022 . Netflix reported in April that it had 221 million subscribers, making it the leader in the streaming market, but that it lost 200,000 users in the first quarter of 2022. If that wasn't enough, it noted that it expects to lose another two million in the year. second quarter.
The loss of subscribers and pessimistic guidance have led investors to question the future growth of Netflix and even the entire streaming business.
The delay in subscriber growth prompted Netflix to consider offering a lower-priced version of the service with advertising. Netflix CEO Hastings said in the April earnings statement that the company "would roll out (the plan with ads) in the next year or two."
Now Roku is a dominant player in ad-supported streaming with The Roku Channel. So it could become an ace in the hole for Netflix. For Netflix, a deal would give it a huge head start as it appears to be leaning towards ad-supported streaming options.
NOT ALL ANALYSTS AGREE
Wedbush analyst Michael Pachter isn't so sure about a Roku-Netflix pairing.
“I love the business of Roku and think it's a great company,” Pachter told BarronS . "It's hard to see how the company is better off if owned by Netflix, as there are very few synergies between the two and Netflix's competitors may be hesitant to offer their services on a Netflix-owned platform."
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/netflix-ha-messo-gli-occhi-sulla-piattaforma-streaming-roku/ on Fri, 10 Jun 2022 05:23:48 +0000.