Quibi gets a new lease on life (and Roku gets a great, ad-tastic deal)
Gone in six Quibis (and back in three)... In October, Quibi announced it was shutting down just six months after launching. The short video streamer had raised a ginormous $1.75B to bring star-studded original shows to your phone (Liam Hemsworth, Idris Elba, Chrissy Teigen — all Quibi'd). The hype was real, but the cruel reality was realer (it flopped). While Quibi is dead, its content is being reincarnated... in the body of a streaming dongle.
If content is king... then Roku just got a royal deal. The popular streaming device company has acquired the rights to 75+ Quibi shows, to be streamed exclusively on its free, ad-supported "Roku Channel." Sure, Quibi had some questionable content (see: show about a woman with a golden arm, show about a sex doll come to life). But it splurged on HBO-level production quality and A-list stars, so Roku's getting a sweet deal:
- $1.1B: How much Quibi spent on content in the first year, topping out at $100K per minute for the priciest shows.
- Less than $100M: How much Roku reportedly paid for all that Quibi content.
- For reference: Netflix spent more than $17B on original content in 2020 alone (you could probably tell from the Bridgerton set design).
Roku is thriving on both sides of streaming... As "the People's Streaming Device" (aka: cheaper alternative to Apple TV), Roku is the leader in streaming hardware, covering over 50M households. That's likely why its stock has nearly 3X'd in value over the past six pandemic months. But more than 70% of its sales actually come from ad sales and subscriptions — and those are growing faster than hardware sales. By beefing up content on The Roku Channel — which has 40K+ movies and shows — Roku can make more ad money and sharpen its double-edge over streamers like Netflix.