Does Roku want a movie studio?
The Future. The Information believes that Roku (now flush with cash from advertising and looking to shore up its programming) may try to buy a full-fledged movie studio next year. A major acquisition like this would be a huge step into Hollywood, positioning Roku as another Netflix competitor. But, studios and marquee production companies may be hesitant to take the bait if The Roku Channel remains only ad-supported.
If Roku does want to buy a movie studio, which ones are on the menu?
- Lionsgate (which may soon spin off its Starz streaming service) could be its biggest target. It’s currently worth about $6 billion and has a bevy of hit franchises in its library.
- Blockbuster-king Legendary Entertainment may be exploring a sale after reports that Wanda Group wants out of the American film industry.
- A24 has had non-committal talks with big fish like Apple about a possible acquisition in the $2-3 billion range.
Growing in stealth
So, how does Roku (the company behind the connected-TV dongle) get enough coin to make that big a splash into Hollywood? After playing hardball with streamers to get a sizable cut of ad revenue and launching an ad-supported streaming service (The Roku Channel), the company now makes way more from advertising than it does from hardware which gives it a $31 billion market cap.
Roku has been open about its desire to make a name for itself in the programming space. When Quibi folded, Roku purchased over 75 of the short-form streamer’s projects and re-classified them as Roku Originals. Additionally, Roku has said that it wants to develop 50 original shows over the next two years. Sounds like something a company that wants to buy a studio would say…