A Fox-Roku Merger Is Just More Industry Consolidation, but Creators Shouldn’t Sweat It Yet

Monday's $22 billion acquisition makes Fox a serious player in the streaming world, but both it and Roku might be best suited to stay in their own lane.

For $22 billion, you would think the acquisition of a streamer and distribution network like Roku by Fox would have a bigger impact on filmmakers, showrunners, and other creators. Fox sold its film studio to Disney in 2019 and hasn’t really looked back, and while Roku has some of its own original content, most notably the “Weird Al” biopic and other unscripted series, it has made its money being the leading way viewers access other people’s content.

That’s why the headline of Monday morning’s acquisition news had everything to do with what it means for sports rights, live news, and advertising, and less about the impact on creators, jobs, or availability of content.

In a Hollywood that’s seemingly merger-mad, that’s new.

With a report in Semafor on Tuesday that held that Netflix was also kicking the tires on a Roku acquisition, not to mention the reality of a Paramount-Warner Bros. Discovery merger getting closer by the day, this particular merger might be the path of least resistance when we’re talking about even more industry consolidation.

Fox has long been skeptical of streaming, doing everything it can to maintain its linear programming (and doing better than some of its peers) despite having a number of streaming platforms like Tubi, Fox Nation, Fox One, and even a faith-based vertical video platform in there. By adding a company like Roku, Fox’s streaming arm can get more competitive, while letting Roku keep growing and doing its own thing.

The two companies in a call on Monday morning said that combined they would have approximately 10.2 percent of monthly TV viewership, per Nielsen, which would put them third behind YouTube and Disney and ahead of Netflix and Paramount (though not a combined Paramount and Warner Bros. Discovery).

But in terms of how people get their TV these days, Roku is far and away the leader. When looking at connected TVs, Roku outpaces Amazon Fire TV, Samsung, Apple TV, Android TV, and Xumo by a healthy margin. There’s also free TV services The Roku Channel and Tubi that are now coming together and which Fox CEO Lachlan Murdoch called “incredibly complimentary” on Monday.

Roku Channel is primarily made up of FAST channels (free ad-supported streaming television), while Tubi, which is also free, leans much more toward on-demand content rather than FAST channels. Murdoch said only about one-third of each platforms’ users overlap, so the intention for now is to keep those platforms separate.

That could mean, in the short term, not much of a change for creators looking to sell their content or for how consumers find it, especially when both platforms are loaded with micro-budgeted, indie films being distributed on a variety of free platforms.

The immediate impact (the deal isn’t expected to close until early 2027, pending regulatory approval) for scripted Fox shows like “Animal Control,” “Doc,” or “The Simpsons” as well as unscripted series like “The Floor” or “The Masked Singer” is that Fox can now freely advertise those series with some prime banner placement on Roku’s homepage, the first thing everyone sees when they turn on their TV. The merger also reunites Roku media president Charlie Collier, a former Fox executive who helped launch Gordon Ramsay’s empire of shows, with his old company, so there’s some love there for that content.

But it also makes Fox a distributor of content, requiring Disney, Universal, or other studios to come knocking if they want to make their channels accessible on Roku devices, or to advertise their own shows in that prime real estate. Analysts at Wedbush in their note to clients on Tuesday said that sparks at least one valid concern and something to monitor.

Wedbush observes that Roku currently is built to just maximize the viewership of any content that appears on its platform, but post-acquisition, it could very easily trade third-party engagement to boost engagement on its own shows and content. Amazon Fire TVs certainly seems to give some preferential treatment to its own content over others. On the flip side, boosting Fox content while stifling everything else could be bad for overall engagement in the long run.

“Explicit suppression of major streaming partners would be commercially self-defeating, as it would give those partners every incentive to reduce Roku marketing spend and accelerate investment in Samsung, Google TV, or Amazon Fire TV,” Wedbush wrote. But the analysts add that The Roku Channel and Tubi have done just fine without needing any additional boost, and this could all be a moot point if regulators determine that Fox needs to agree to “algorithmic neutrality” as a condition to getting a merger approved.

The bigger question would be, if you’re Fox and Roku and have a TV business and a streaming business, do you get back into the movies and studio space? Probably not, Wedbush speculates, though maybe it makes Fox another contender for a smaller indie (Lionsgate, anyone?), which would just lead to even more consolidation, and at that point a more serious conversation.

“We think post-close, a combined company will remain in their respective lanes within the broader entertainment ecosystem, with Fox primarily focused on sports and news, and Roku a platform leader with an increasingly important advertising business that will accelerate growth for the sports and news properties,” Wedbush added.

We can live with that.