Netflix generated news this week when rumors began to leak out from employees at Roku that the world’s largest streamer provider is working to acquire their company, the largest provider of Smart TV software. The combination would create numerous opportunities for Netflix to leverage Roku’s platform, already present in 61 million homes worldwide. Netflix could partner with Smart TV manufacturers to deliver additional visibility to their service. They could also use Roku’s substantial database of viewing statistics to gain insights on consumer viewing trends, including from competitors like Apple, Amazon, and Disney.
Roku’s stock price has fallen by 80% since last summer, which lowers the price of the acquisition to the point that Netflix could sell it to investors as a good deal. However, Netflix itself has struggled with its own stock decline, after reporting disappointing Q1 results which included a slight decline in the number of its U.S. subscribers. Roku’s stock surged by 13% last Wednesday after Business Insider published news of the potential acquisition.