Roku is throwing down a whopping $185 million to dip its toes into a realm that most other streaming services have shied away from. In a recent announcement, the company revealed its plan to acquire Frndly TV, which happens to be the most budget-friendly live TV streaming service out there. For just $9 a month, Frndly TV offers a package of channels that you’d typically find in a cable TV subscription, including popular ones like Hallmark, A&E, and The Weather Channel.
Unlike most streaming platforms that stick to offering their own free or premium content, Roku is venturing into uncharted territory by selling bundles of cable channels along with optional DVR service. This move is quite out of the ordinary, as Roku claims it’s simply aiming to ramp up subscription revenues on its platform. But, let’s be real, there’s probably more to the story than meets the eye.
Frndly TV falls under the category of a “virtual Multichannel Video Programming Distributor,” or vMVPD for short. These services are essentially cable TV packages delivered over the internet, complete with a bunch of channels, a channel guide, and DVR capabilities. Most major streaming platforms have steered clear of this business due to the complexities of securing carriage deals with TV programmers and the slim profit margins involved. Roku, however, sees potential in Frndly TV, which reportedly turned a profit in 2022.
The company’s primary goal for now seems to be following the same strategy it used for the Roku Channel, an ad-supported service launched in 2017. By heavily promoting its own service on the platform, Roku managed to increase its revenue. It plans to do the same for Frndly TV by leveraging its home screen. But, who knows, maybe Roku has bigger plans in mind. Perhaps Frndly TV is just the first step toward offering a wider range of pay TV channels. After all, Frndly TV caters to a specific niche of reality TV and reruns, lacking the top cable channels, news, and sports coverage. Roku could potentially expand its channel offerings over time, negotiating better deals on behalf of its 90 million households and presenting itself as a go-to solution for accessing cable channels.
While it may seem like a straightforward move, Roku’s venture into the vMVPD business could signal a major shift in the streaming landscape. Maybe other platforms will follow suit, or maybe Roku will pave the way for a new era of channel bundles. Who knows? Only time will tell. But one thing’s for sure, Roku is making moves, and we’re here for it.
