Fox is acquiring streaming platform Roku for $22 billion, creating what analysts call the third-largest player in US streaming by share of viewing. The deal gives Fox direct access to Roku's 100 million households worldwide and positions the combined entity to dominate the free ad-supported streaming TV (FAST) market.

"For Fox it really jumpstarts their digital ad revenues," said our analyst Ross Benes on a recent episode of "Behind the Numbers." "Fox is still mostly a legacy company, and what they do have for streaming has largely been acquired, such as Tubi."

The acquisition, expected to close in the first half of 2027, combines Roku's platform with Fox's existing streaming assets, including Tubi and Fox One. Roku is the biggest streaming platform for smart TVs in the US, running on more than a quarter of internet-connected devices, according to research firm Parks Associates.

First-party data becomes the crown jewel

Roku's first-party viewer data and hardware-level identity tracking from Roku's operating system (OS) put Fox in the same targeting conversation as Amazon and Google. That is a different business from selling legacy TV inventory.

Fox is buying that targeting capability at the moment marketers are paying for it. Some 60% of US marketers are turning to first-party data strategies to address cookie deprecation, according to March 2024 data from Epsilon and Phronesis Partners. Roku brings Fox data from more than 100 million households to sell against that demand.

None of that data depends on third-party identifiers. Fox gets purchase-based data and direct customer relationships, which is where ad dollars go when they leave cookie-dependent platforms.

FAST dominance could reshape streaming landscape

The combined company will control both Tubi (2.3% viewing share) and The Roku Channel (3% viewing share), according to Nielsen's April gauge. While Fox says it will keep the services separate, the combined 5.3% share would leapfrog Disney's 5% to claim third place behind YouTube (13.4%) and Netflix (7.8%).

"They're gonna have these two monumentally huge FAST platforms at the same time," said EMARKETER principal forecasting writer Ethan Cramer-Flood. "They could be carving out just a totally different type of presence, the company that gives us all free stuff online when nobody else is doing that."

Fox CEO Lachlan Murdoch said that only one-third of the audiences overlap between Tubi and The Roku Channel, suggesting significant potential for combined reach.

Fox's opening is the lane its competitors have left empty. If it leans on free ad-supported content instead of premium subscriptions, it can serve viewers looking for alternatives to expensive streaming services rather than fight for the same subscribers.

Integration challenges loom large

Legacy media companies buying digital platforms have a poor track record, and AOL-Time Warner remains the cautionary tale. Investors have already registered the doubt: Fox's shares fell after the announcement, though some analysts note big media deals often face short-term uncertainty.

"There isn't a great history of taking a digital media company and meshing it with a legacy media company," Benes said. "It may be difficult for Roku to keep that innovative spirit alive when you're owned by Fox."

Fox has to keep Roku's platform neutral enough that viewers and rival services still want it, while using it to its own advantage. That tension decides whether the $22 billion creates value or destroys it.

Listen to the full episode.

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