Roku Becomes Pay TV's Streaming Box Of Choice, Raises $45 Million From News Corp, BSkyB, And Others
When Roku first entered the streaming video market, it was seen as a boon for cord cutters, who could watch streaming content from online distributors like Netflix and Hulu Plus on TV.
Context & Ripple Effects
Roku built its name as the cord-cutter's box — a cheap way to put Netflix and Hulu Plus on a TV without a cable subscription. The $45 million round changes the story's cast: the new money comes from News Corp and BSkyB, meaning the pay-TV establishment is now funding the device that was supposed to help viewers leave it behind.
The pickup was unusually wide for a funding note — CNET, Gizmodo, The Verge, Engadget, the Telegraph and others all ran it on or about July 26, 2012 — which reflects how loaded the symbolism is: TechCrunch reports Roku has become the streaming box pay-TV providers themselves choose, a reversal of its founding premise.
First-order effects
- Roku gains $45 million plus strategic investors whose businesses depend on TV distribution — BSkyB and News Corp now have a financial stake in steering how their subscribers reach streaming content.
- Pay-TV operators get a ready-made bridge product: a box that carries Netflix and Hulu Plus alongside their own services, letting them offer streaming without building hardware.
Second-order effects
- Rival streaming devices — Apple TV and Google's efforts among them — lose the argument that pay-TV partners will default to first-party ecosystems, since carriers are voting with investment dollars for Roku.
- Content owners tied to the investors gain leverage to get their TV Everywhere apps preloaded or promoted on Roku, tightening the link between carriage deals and box placement.
Third-order effects
- If pay TV keeps funding third-party streaming hardware rather than building its own, the set-top box consolidates around independent platforms whose economics come from placement and services, not subscriptions alone.
- The cord-cutter tool becoming the carrier's chosen device points toward hybrid bundles — traditional pay TV sold through streaming-first hardware — blurring the line the product was invented to draw.
The trend: Legacy media companies are buying into the streaming hardware layer rather than fighting it, turning cord-cutting devices into distribution infrastructure they part-own.