Fox acquires Roku for ~$22B, betting on ad-supported streaming and connected TV dominance

Fox is acquiring Roku for approximately $22–25 billion, uniting a traditional media company with the dominant connected TV platform in a bet that ad-supported streaming will reshape television economics.

The deal values Roku at $160 per share in a mix of cash and Fox stock. Fox will fund the cash portion—roughly $12 billion—through new debt and existing cash reserves. The combined company expects to cut $400 million in annual costs and will maintain Tubi and the Roku Channel as separate offerings.

The strategic logic centers on advertising reach. Roku commands over 40% of connected TV watch time despite holding only 25% market share—a meaningful advantage for selling ad inventory. Ad-supported streaming plans now represent nearly 50% of all premium subscription video on demand sign-ups in the US, up from 39% two years ago, a trend Fox believes will accelerate as subscription prices climb.

Fox's own streaming efforts—Tubi and Fox Nation—have momentum. Tubi, acquired for $400 million in 2020, now generates north of $1 billion in revenue and reached nearly 100 million monthly active users in its most recent quarter, with 23% revenue growth. Attaching that audience to Roku's distribution network and ad platform creates scale that neither asset delivers independently.

The market reaction was skeptical. Fox stock declined, though Roku moved modestly. Skeptics question whether combining a cable-era media company with a streaming platform justifies the price, but the strategic merit hinges on a narrower thesis: Roku's dominant position in connected TV watch time makes it a valuable advertising property as dollars migrate from linear television.

Roku's origin is relevant context. Founded by Anthony Wood in 2002 as his sixth startup (roku means six in Japanese), it emerged from Netflix's decision to kill an internal set-top box project in 2007. Netflix ultimately chose to remain platform-agnostic rather than risk losing distribution. Roku released its first device in 2008 and built a modular hardware and software business that dominated connected TV platforms over the following decade.