Roku Employees Think Netflix Is Buying Their Company
If the rumors are to be believed, Netflix is about to acquire Roku, and with it secure its own range of media streaming devices as well as a growing ad business.
As Business Insider reports(Opens in a new window), employees at Roku believe an acquisition is imminent. Over the past year the company's stock price has dropped 80%. Combine that with weaker demand for streaming devices/services, and Roku's management recently closing the trading window for employees with vested stock, and you can start to see why.
Netflix buying Roku is apparently being viewed as a positive move by people in the industry. The huge drop in stock price makes Roku relatively cheap to acquire at a valuation of under $13 billion, but it's the company's ad business that is being viewed as the main draw. It generated $647 million during the first quarter, and would allow Netflix to more easily introduce and quickly scale an ad-supported streaming subscription.
Three of Netflix's main rivals: Amazon, Apple, and Google, all offer their own streaming devices. Roku has its own range of popular streaming boxes, which Netflix could continue to sell complete with generous free streaming offers. However, Reed Hastings isn't a fan of the hardware business, stating back in 2014 at the Code Conference, "We're working with over 1,000 devices now. There's no value add for us to do a device." That view may have changed over the past eight years, especially considering how much competition Netflix now faces.
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