Roku said on Friday it acquired Quibi’s library of content nearly three months after the streaming service shut it down.
Following an internal restructuring by Quibi, Roku has acquired Quibi Holdings, LLC, the company that holds all of Quibi’s content distribution rights. Roku will make Quibi’s portfolio of original programming, which includes more than 75 shows, available free to its users in 2021 on The Roku Channel, the company’s free, ad-supported streaming app.
Terms of the deal were not disclosed, but the Wall Street Journal reports Roku paid less than $100 million for the rights.
When Quibi launched in April, it touted itself as a new mobile-first streaming service that would revolutionize how people consumed entertainment. The startup attracted some of the biggest names in Hollywood to star in short-form, original series designed for people to watch while standing on line at the store or while commuting.
But Quibi entered a crowded market with a high price point — $5-per-month with ads — and failed to gain traction among consumers while its value proposition was affected by lockdowns during the pandemic.
Quibi officially shut down in October just six months after its launch, after failing to deliver on subscriber numbers and commitments to advertisers.
Roku, on the other hand, has experienced rapid growth due to the pandemic, in both its user base and its advertising business. The streaming giant announced on Wednesday it has surpassed 50 million subscribers, putting it in close competition with Amazon Fire TV.
Roku has also been growing its ad sales business over the past few years, largely through The Roku Channel, its free, ad-supported streaming service. In the last three months of 2020, Roku estimated that The Roku Channel reached households with an estimated 61.8 million people. In Q3, platform revenues on Roku, which include ad revenues, grew 78% to $319 million.
But to get people to watch The Roku Channel, it needs to bolster its content library. Quibi’s short-form content is more flexible from mobile to TV screen than people think, as well as conducive to binge viewing, said Rob Holmes, vice president of programming at Roku.
“Quibi’s programming was built in a way that propels you from one episode to the next because they wanted you to come back,” he explained. “It was built the way that you use on a big screen experience.”
Short-form content is becoming a bigger trend on the living room screen, said Mike Bloxham, SVP of global media and entertainment at Magid. Bite-size videos were once pegged to computer and mobile screens, but are now getting picked up by streaming services that aren’t confined to linear broadcast schedules and ad pods.
Quibi’s catalogue is the first batch of original content Roku has acquired for The Roku Channel. The platform has been striking deals with content creators on YouTube, such as Pocket.watch, the entertainment company that represents popular YouTube creators such as Ryan’s World and Kids Diana Show, saw a 40% growth in viewership since partnering with the platform.
Roku doesn’t have any immediate plans to acquire more original content, but the company is flexible about potential future options, Holmes said.