As Netflix moves forward on its ad-supported tier streaming service, rumors are starting to sprout that the company is looking to make an acquisition.
Sources familiar with the subject suggest that Netflix is targeting Roku. But Netflix isn’t necessarily interested in the streaming hardware.
The report comes from Business Insider, which spoke to sources familiar with the matter in recent weeks. The sources claim that Netflix is after the streaming hardware company’s advertising business.
Roku’s stock has been plummeting in the last year or so. The overall demand for video streaming has subsided in recent months. And streaming hardware is suffering even more.
But what’s keeping Roku afloat in these times is its advertising business. Roku has built a massive advertising platform using its devices. Advertising generated more than $640 million for the company in the first quarter of this year alone.
For Netflix, a Roku acquisition could give it a major jump-start in its own push towards the advertising realm.
Not only would the company get gain a database that it can use for targeted ads, but it could also get access to data from any users with Roku devices, across any streaming service available on the devices.
Of course, these are all just rumors at this point. Sources told Business Insider that Roku had halted trading of its stock for all employees, which could indicate a possible acquisition.
But that halt could also be indicative of any potential information that could affect stock prices, avoiding any potential insider trading.
For now, we’ll just have to wait and see. But don’t be surprised if Netflix does make a move to acquire Roku. The hardware business isn’t necessarily great for Netflix. But the advertising opportunities that Roku provides might be appealing enough to make a move.
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