Netflix might buy Roku to fast track ad-supported tier
Netflix may have found a remedy to slumping shares and slowing subscriber growthBy Shawn Knight 23 comments
In brief: Netflix's recent woes could be short-lived should a rumor making the rounds come to fruition. Sources familiar with the matter told Business Insider that Roku employees have been buzzing in recent weeks about the possibility of an acquisition by streaming giant Netflix. Two people told the publication that Roku recently closed the trading window for employees, a move that prevents them from selling their vested stock.
Netflix recently said it was open to the possibility of launching an ad-supported tie. Sources last month said the company was hoping to launch the new tier as early as the fourth quarter of this year. Adding Roku to its portfolio would certainly help with that endeavor as the company has built a robust video advertising platform to go with its hardware devices.
Timing could play into Netflix's favor as well considering Roku's stock is down nearly 80 percent since last July. Netflix, meanwhile, has been dealing with its own issues including a quarterly loss of subscribers for the first time in a decade, declining share value, password sharing and waves of layoffs.
What's ironic about the whole situation is the fact that Roku and Netflix have a long history. Roku founder and CEO Anthony Wood developed a set-top box that Netflix planned to launch in the latter part of the 2000s. Just weeks before launch, Netflix boss Reed Hastings had a change of heart, scrapped the project and spun the business out.