"Netflix is viewing advertising as the next growth lever and a key part of building a sustainable business model. This is a core muscle and strength of Roku. Roku is the most popular smart TV operating system, so it gets Netflix additional market share in a relevant space. Additionally, that means even better data and strength in the audience signals for both advertising platforms. Roku already has a massive CTV ads network, so it could be looking to leverage some of its experience and tech in getting its own ads network spun up. Tech stocks have been hammered this year. Roku is down 70% in the last year. It could be an opportunistic time to buy if [Netflix has] a long-term view and bullishness."
"The potential acquisition of Roku by Netflix will result in a formidable platform for premium streaming content. The combination of Netflix's audience scale, content production and data, with Roku's vast footprint of streaming devices and connected TVs (CTVs), will result in an end-to-end streaming media platform that rivals the largest of the existing tech platforms and media companies. The incorporation of ad-supported packages into this will present advertisers with a powerful way to reach and target a large audience with a premium advertising message, effectively bringing the power of technology and data together with the quality, experience and scale of TV."
"This is a validation of the advertising video on-demand (AVOD) business model. Netflix's ability to bring a new level of great content to consumers in an ad-supported way is good for consumers, content creators and also analytics providers."
Netflix is positioning advertising as a primary growth lever and a key component of a sustainable business model. Roku’s status as the most popular smart TV operating system would give Netflix increased CTV market share and stronger audience signals for advertising. Roku’s existing massive CTV ad network and ad-tech experience could accelerate Netflix’s ad-supported offerings. A combined Netflix-Roku platform would pair Netflix’s content scale and data with Roku’s device footprint to create an end-to-end streaming media platform with powerful targeting for advertisers. Validation of AVOD could benefit consumers, content creators and analytics providers.
Read at The Drum
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