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This is Lowpass by Janko Roettgers, a newsletter on the ever-evolving intersection of tech and entertainment, syndicated just for The Verge subscribers once a week.
When Fox announced its acquisition of Roku earlier this week, executives of both companies were quick to promise that not much would change in the near future. Sure, getting its hands on Roku will help Fox become a major force in streaming, and surpass the viewership of Netflix in the United States when you include Fox’s TV networks. But Roku will remain open to all streaming services, and Fox will keep selling its programming to anyone, they pledged.
Of course, that doesn’t mean everything will stay the same. I expect that the deal will have a significant impact on both companies, and that Roku owners will see major changes once it closes. Here’s what I believe is in store for Roku’s future:
The Roku Channel will become a Roku exclusive
One of the questions analysts had on a joint Fox and Roku investor call earlier this week was: What does this deal mean for the future of Tubi and The Roku Channel, the ad-supported streaming services operated by the two companies? The diplomatic answer: The services are complementary, with Tubi mostly serving up movies and TV shows on demand while The Roku Channel has a lot more eyeballs on free, ad-supported streaming channels (also known among industry insiders as FAST channels).
That’s true, to a degree. Tubi’s leadership initially didn’t believe in the potential of linear channels and instead put a greater emphasis on being a free Netflix alternative. Roku, on the other hand, had its software deeply embedded in smart TVs and knew that it could build a replacement for the cable guide if it went all in on linear streaming channels.
At the same time, Tubi and The Roku Channel do squarely compete with each other on third-party platforms like Fire TV, Google TV, and Samsung, where consumers can download either app to access free programming. Roku expanded onto those platforms a few years ago, but that expansion has been an ongoing cause of confusion for consumers. Many simply can’t understand why the Roku app they downloaded onto their Samsung TV or Fire TV doesn’t offer them the exact same experience as a Roku device.
Another cause of frustration: Roku offers owners of its devices the ability to subscribe to third-party services like HBO Max and Paramount Plus through The Roku Channel. But if they fire up The Roku Channel’s app on the Samsung TV in their bedroom, those paid subscriptions are MIA.
To simplify all that, I predict that Fox will opt to make The Roku Channel a Roku exclusive, and bet on Tubi as the sole app for ad-supported viewing on third-party devices.
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