LEILA FADEL, HOST:
Fox Corporation is going all in on streaming. It says it will buy Roku in a deal worth more than $22 billion. According to Fox and Roku, the combined media company would be the third-largest in TV viewership. Matt Belloni is covering this. He's a founding partner of the news site Puck and writes its "What I'm Hearing" newsletter. Good morning, and welcome to the program.
MATT BELLONI: Thank you. Good morning.
FADEL: So what makes Roku attractive to Fox?
BELLONI: Well, it's the gatekeeper for about 100 million households. It is the first screen that people go to when they want to stream content on the internet. And that is an incredibly powerful platform, especially for a company like Fox, which is, for the most part, a linear TV company. They have Fox News. They have Fox Broadcasting with the sports rights. But now this instantly makes them a player in the streaming wars.
FADEL: Now, there have been a lot of acquisitions and mergers in the streaming industry in the past few years. How has the consolidation affected streaming customers?
BELLONI: Well, that's a good question because right now we're seeing - this is a pretty big consolidation. But the shift has been mostly from subscription and no ads on these services to increasingly, we're seeing ad-driven options. People have shown that they don't mind taking advertising as long as the price for their streaming service will come down. And that's where all of these services going. And frankly, this is why Fox was so interested in Roku, because Roku is an incredibly powerful advertising platform and that's where the growth is for these streaming services...
FADEL: Interesting.
BELLONI: ...And, frankly, what customers want.
FADEL: Do you expect to see things get more expensive?
BELLONI: I honestly think that it will become a kind of K-shaped economy in streaming, where people will pay a lot more for the privilege of not seeing ads on services like Amazon Prime Video and Netflix and Disney. And then they will have these ad-driven products, which will likely get cheaper because the ad load on those services will get greater. So the monetization will be there, and people will have the option to get their content for less money if they're willing to take more ads.
FADEL: Roku has a streaming service, but it also has smart TVs and devices that play other streaming services. Will this deal affect other big streamers?
BELLONI: They're saying no. They're saying that this is - that the benefit of this is that Roku will remain the Switzerland of streaming, where it will host other services. You can get them through Roku. And the promotion platform of the Roku interface will be available to others as well. We'll see how Fox manages that because obviously, there's a benefit in owning. And you can promote all the Fox content and NFL and World Cup right now while also having it available to others, but, you know, primarily putting it in front of - you know, for your customers.
FADEL: Really quickly, I mean, the Murdoch family owns Fox, so I want to talk about actual content here. Are they likely to push more conservative content toward Roku's customers?
BELLONI: That is a fascinating question. We will see because obviously, this gives Fox a huge promotional platform, which they could use to put their - you know, their conservative Fox News in front of a lot more people. And I think we'll see some of that. But the Murdoch family has been pretty disciplined in the past about separating their conservative news outlets from the more entertainment, general-oriented stuff.
FADEL: OK. Matt Belloni of Puck, thank you for your time.
BELLONI: Thank you.
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