Netflix started its life as a DVD rental service in 1997, but it transitioned to an on-demand video streaming service over the years, quickly rising to become one of the most used ones with tons of excellent original content. The company has also started dipping its toes into gaming, but if new rumors making the rounds right now have any truth to them, its next big venture might be hardware. How, you might ask? With nothing other than the acquisition of Roku.
As per a report from Insider, citing people familiar with the matter, chatter is heating up inside Roku's offices about a possible buyout and takeover by Netflix, as employees have been discussing that possibility in recent weeks, and Roku has reportedly given its employees a deadline for selling vested stock — a possible prelude to acquisition talks.
Whether Netflix is actually planning to put a bid on the table (or is already doing so) is something no one is really sure of right now, but while the company has seen better days, seeing a subscriber drop for the first time in years, you can say the same about Roku — it's still one of the main streaming device makers, but its stock has dropped steeply since last July as a response to weaker demand for video streaming.
More than this being a case of a sinking ship buying a smaller, also-sinking boat, though, Netflix's interest in Roku may actually lay down on one thing — ads. Netflix has been looking to resort to advertising to keep the lights on while it's losing subscribers left and right, and Roku made $647 million through its video ad platform during the first quarter. So it makes sense for Netflix to look in that direction. It would also bring things full circle — the first hardware efforts by Roku were actually led by Netflix in 2007 under the ill-fated Project Griffin. It never materialized, and Roku was spun off as an independent company, which would go on to launch its first streaming device in 2008.
We'll have to stay tuned to see if Roku becomes a part of Netflix once again.