Roku's Quibi Deal Proves Streaming Juggernaut More Than Device Maker

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Inside Roku’s Quibi Deal – and the Streaming Platform’s Surprise Content Play

“We’re stepping into Quibi’s shoes,” Roku’s programming VP Rob Holmes tells TheWrap

Roku has positioned itself as one of the major gatekeepers in the streaming era, but its surprise deal on Friday to acquire 75-plus shows from the short-lived streaming service Quibi proves the tech company isn’t satisfied with only being a device maker. It aims to compete with larger tech giants like Amazon and Apple.

Roku’s deal for Quibi’s content allows the company to significantly beef up The Roku Channel, its free, ad-supported streaming service. It’s by far the largest exclusive licensing deal for the 3-year-old digital network and one that Roku VP of programming Rob Holmes said fits with a plan to capitalize on the growing but underserved ad-based video-on-demand (AVOD) market.

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“We’re big believers in AVOD and started the Roku Channel three and a half years ago to really sort of support that trend,” Holmes told TheWrap. “The underlying kind of reason to get started was that there was a lot of content, but it was scattered across literally thousands of channels. And we wanted to bring it all together.”

Roku and Amazon’s Fire TV are neck and neck when in the race for streaming platform dominance, each with more than 50 million active accounts. But competition in that space is increasing. Along with Apple TV, Google is beefing up Chromecast into Google TV, seeking to increase its land grab as streaming devices are starting to replace pay-TV operators as the main distribution pipeline for consumers.

But the San Jose-based company, which has only been around since 2008, is fighting against much bigger-pocketed tech giants. One way to compete is with advertising. “Our goal is to maximize active accounts and get our devices and software platform out to as many users as possible, and then to offer great ways for them to engage,” Holmes says. “I think this really powers our advertising business in a unique way.”

And Holmes doesn’t see the Quibi acquisition as a harbinger that Roku will dive fully into original content and try to out-muscle a Disney+ or HBO Max that are spending billions of dollars to ramp up original programming to challenge streaming titan Netflix. (Roku spent less than $100 million for the Quibi shows, according to the Wall Street Journal.) “The Quibi deal is a unique deal,” he said. “And so we’ll continue to be out in the market, kind of flexibly looking to license stuff. This is not the beginning of some large-scale development pipeline.”

Quibi, a $1.875 billion subscription streaming startup that Katzenberg and Meg Whitman launched last April to great fanfare, failed to gain any kind of foothold with customers and shut down in December. Unlike other streaming services, Quibi split up its series and movies into “quick bites” of less than 10 minutes each that were designed to be viewed on mobile devices.

Anna Kendrick in “Dummy” (Quibi)

Holmes argued that Roku will give Quibi’s content something it didn’t have on Quibi: an audience. It’s been no secret that Quibi struggled to find one. “Our scale, that pivot from SVOD to AVOD, and our ability to lean into this, promote it, show it on the big screen. Those are all reasons why we expect there to be sort of a different outcome here with the content.”

Quibi’s deals with its content producers were atypical of other platforms, allowing creators to own their stuff after an exclusive seven-year window on its service. Roku’s acquisition includes series like Anna Kendrick’s “Dummy,” “Most Dangerous Game” starring Liam Hemsworth and Christoph Waltz, as well as Antoine Fuqua’s “#FreeRayshawn,” which scored a pair of Emmy Awards last fall.

The content will start to roll out in the months ahead, but won’t drop all at once. And some shows that were completed but never managed to debut before Quibi shut down will launch instead on The Roku Channel.

“We’re stepping into Quibi’s shoes. And so everything that Quibi is a party to is now with us,” Holmes said, adding that the company is gauging interest with Quibi content creators who have other unfinished projects. “All the completed shows — that one’s easy, right? Come over. And then we’re really just now kicking off conversations with folks on things that are anywhere from like almost done to very early stage.”

Tim Baysinger

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