When you turn on the TV, how do you decide what to watch first? YouTube, Netflix, and Disney+ are among the most popular individual video platforms. But the answer that increasingly determines your TV choices may be Roku, Amazon Fire, and Apple TV. Why? Because these companies control distribution, not just content programming. All three operating systems have the streaming services and apps we use every day. That’s what makes Fox’s acquisition of Roku so compelling. It’s a higher level bet than the live streaming wars. Instead of competing directly with Netflix, Disney+ and HBO Max, Lachlan Murdoch is moving to own the monetizable entertainment distribution layer alongside Amazon and Apple.
Earlier in the streaming wars, individual services fought over content. Everyone wanted the biggest offers that built the biggest subscriber bases. Netflix Strange things,holo The Handmaid’s TaleAnd Amazon Prime Video Boys– Originals that attracted new customers en masse. HBO’s all-consuming cultural chaos game of thrones Motivate competitors to spend tens of millions of dollars on impressive IP. Marvel, Star Wars, DC, and Lord of the Rings.
These programming skirmishes are still ongoing, but on a smaller scale. As the industry has matured, the focus has shifted somewhat away from individual content lists and toward control over discovery, recommendations, and placement. Here lies the real power and value. Roku, Amazon Fire TV, Apple TV, and Walmart’s Vizio are all the YouTubes, Netflixes, and Disney+s of the world. Those who watch Paramount+’s Landman Or HBO Max the house They will likely do this via one of those companies’ devices.
Imagine that TV platforms are like real estate in a game of Monopoly, and the individual streaming devices and apps that capture our attention are the homes and hotels built on top of them. It’s easy to see where leverage is stored in that dynamic. (Investors remain more cautious as FOX shares fell 18 percent in the first hour after the deal was announced, and Roku stock fell 1 percent.)
How Fox is leveling up
The further we get from the 2000s, the clearer it becomes that Fox slimmed down in order to enhance his capabilities. This Roku acquisition is the highest evidence yet.
On the micro side, this gives the company a strong foothold in the small but growing world of free ad-supported television (FAST). Combined, Fox’s Tubi (2.2 percent) and Roku’s The Roku Channel (3.0 percent) account for monthly U.S. TV screen time and are within striking distance of Disney+ (5.3 percent), according to Nielsen scale. (However, One-third overlap Between the two audiences, or viewers using both, that would reduce the combined total somewhat.) A quarter of Roku Channel viewing comes from home screen tile mode, while the other 75 percent comes from search and discovery. The combination of all Fox, Roku and Tubi distributions makes the company the third-largest distributor of connected TV in the United States, according to Nielsen.
But Roku isn’t just another streaming service. On a macro level, this is the front door to all streaming. Video-on-demand transactions (renting or purchasing titles once) and third-party subscription marketplaces (subscribing to streaming devices available on these apps) are lucrative businesses. “Amazon Channels is, by all accounts, the largest distributor of streaming services With nearly 100 million subscriptions globally, from which they take a commission,” Owl & Co. founder Hernan Lopez wrote in his book Economics Newsletter. Apparently Fox is chasing a similar quarry.
As I am previously coveredFox sold its entertainment assets to focus hyper-focused on sports, news, Tubi and the growing creator economy. In what may or may not be a sign of a fragmented future, abandoning blockbuster films for sentimental niches has worked. The stock has risen 33 percent over the past five years. But the model was too dependent on the rapid decline of linear television. The move takes a unique angle into streaming that’s more significant than Fox One and Fox Nation.
Is there now an argument that Fox is the best-positioned legacy media company thanks to a limited focus on content and having high-value consumers? Roku, Amazon, Apple and Vizio have figured out how to let programming from rival companies funnel money into their own coffers.
Quietly winning the streaming wars
I previously Argue Sony won the streaming wars by keeping it out. Fox pretty much did too, saving itself billions in the process. The biggest difference now? After taking control of Roku, Fox is poised to take a cut of its rivals’ subscription and advertising revenues.
Rocco usually takes it About 20 percent of each subscription to a third party The in-app purchase or sale is made through its operating system, and a piece of advertising from About 30 percent. (Apple is known to collect between 15 and 30 percent of TVOD.) So the company makes money every time, say, a Dove ad appears on Hulu or you subscribe to HBO Max through its system. With more than 100 million families in the world With Roku, few, if any, competitors can afford to give away the service.
As we’ve seen across the industry in recent years, subscriber growth is hard to come by. This is partly because the live streaming audience has become More homogeneousaccording to data from Greenlight Analytics, where I serve as Director of Insights and Content Strategy. Since 2024, exclusive broadcast viewers who do not use linear TV have become older, more female, less diverse and less engaged. This makes content discovery more important than ever.
Hollywood has spent a decade trying to catch up and beat Netflix on the assumption that becoming the default destination is the only way to survive. Fox bets it might be more profitable to own the bridge that gets you there.
