With Roku Acquisition, Fox Runs Its Own Streaming Race
Fox is acquiring Roku for $22 billion in cash and stock to transform from a content provider into a vertically integrated media platform. According to CEO Lachlan Murdoch, Fox intends to keep Tubi and The Roku Channel as separate services to maximize their complementary reach across the U.S. streaming market.
Why did Fox acquire Roku for $22 billion?
Fox is moving to control both the content and the pipes used to deliver it. Abe Yousef, a senior insights analyst, wrote that this move evolves Fox from a primary content owner into a platform that controls distribution, advertising, and consumer discovery.
While competitors like Disney, Netflix, and Warner Bros. Discovery spent billions building proprietary subscription services, Fox avoided the high-cost “streaming sprint.” Instead, Fox focused on niche, ad-supported models. This strategy culminated in the 2020 acquisition of Tubi for $440 million, a move that provided a high return on investment.
By acquiring Roku, Fox gains access to an operating system present in more than 100 million global streaming households. This gives Fox direct ownership of the user interface, allowing them to prominently feature Fox One, Tubi, and Fox Nation within “Roku City.”
How does the Tubi and Roku combination affect viewership?
The two services target different viewing habits, which prevents audience cannibalization. Fox reported on an investor call that Tubi consumption is roughly 90% on-demand, whereas The Roku Channel is approximately 80% FAST (Free Ad-supported Streaming Television) viewership.
Fox stated there is only about a one-third overlap between the two audiences. By combining these user bases, Fox expects to leapfrog NBCUniversal and potentially Netflix in total TV viewing when measured by Nielsen’s Media Distributor Gauge.
This synergy extends to mobile usage. Sensor Tower data indicates that the Roku app and Tubi combined would reach 50 million monthly active users (MAUs) in the U.S. This figure surpasses the share of Disney+ and trails only Netflix, which holds 108 million MAUs.
What happens to Fox’s live sports and news distribution?
Fox’s most valuable assets—live sports and news—have struggled to scale on Fox One due to aggressive cord-cutting. These high-value “pay-to-play” services cannot live on Tubi’s free model.
Roku provides the necessary scale. With the acquisition, Fox can deploy Fox One and Fox Nation directly onto Roku’s revamped homepage. This removes the friction of third-party app stores and puts live sports directly in front of millions of households.
Additionally, the deal provides Fox with massive amounts of first-party proprietary data. Roku previously kept this consumer behavior data under wraps; now, Fox can use it to optimize ad targeting and content acquisition.
When will the Fox-Roku deal close?
The transaction will not close until 2027, pending regulatory approval. During this interim period, the companies will operate independently.
Lachlan Murdoch confirmed on an investor call that the current expectation is to keep Tubi and The Roku Channel as separate services. He noted that the services “serve consumers and our viewers in different ways,” suggesting that a merger of the two apps could alienate specific user segments.
Comparison of Streaming Approaches
| Strategy | Industry Standard (Disney/Netflix) | The Fox Approach |
|---|---|---|
| Investment | Heavy spend on original content/subscriptions | Paced growth; focus on FAST/Ad-supported |
| Distribution | Rely on 3rd party OS (Roku, Apple, Amazon) | Acquired the OS (Roku) for vertical integration |
| Revenue Model | Primarily Monthly Recurring Revenue (MRR) | Hybrid Ad-supported and Premium (Fox One) |
Frequently Asked Questions
How much is Fox paying for Roku?
Fox is acquiring Roku for $22 billion in a combination of cash and stock.
Will Tubi and The Roku Channel merge into one app?
No. CEO Lachlan Murdoch stated the expectation is to keep them as separate, complementary services.
How many users will the combined entity have?
According to Sensor Tower, the combined mobile reach of Tubi and Roku is 50 million monthly active users in the U.S.
When does the acquisition become official?
The deal is expected to close in 2027, subject to regulatory approval.
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What do you think about Fox’s strategy to buy the platform rather than just the content? Let us know in the comments below.