Fox’s $22 billion Roku acquisition makes it the king of the FAST lane. What’s next?

During a recent call with investors, Fox Corporation CEO Lachlan Murdoch delivered some major news. Murdoch revealed that his company will acquire Roku in a deal that values the streaming company at $22 billion.

The cash-and-stock transaction will turn Fox into a streaming titan. In addition to Fox-branded apps like Fox Nation and Fox One, the media corporation also controls Tubi, a top app among cost-conscious consumers. Adding Roku to the Fox portfolio creates an empire that excels across multiple streaming formats. Whether your preferred acronym is SVOD, AVOD, or FAST, Fox has you covered.

Unpacking those acronyms is key to understanding the differences between Tubi and Roku, which — according to Murdoch — Fox plans to keep separate. Tubi describes itself as an ad-supported video-on-demand (AVOD) hub, which is distinct from the cable-style model known as free, ad-supported television (FAST). The Roku Channel utilizes an AVOD model, but Roku has also become a discovery engine for FAST channels as well.

When you add in the limited overlap between the Tubi and Roku user bases, their continued separation makes plenty of strategic sense. “If you look at Tubi and the Roku channel together, they are incredibly complementary services,” Murdoch said during the investor call. “There’s about a third overlap between the audience, between the two of them, so that they’re not identical audiences. Bringing the two of them together, you know, effectively, triples the reach of the combined service.”

While the differences between AVOD and FAST can sometimes be quite subtle, both models differ significantly from subscription video-on-demand (SVOD), the prevailing model for services like Netflix and HBO Max. While SVOD platforms often struggle under the weight of bloated, big-budget originals (which sometimes have disappointing endings), the economics of AVOD platforms encourage companies like Fox to place smaller, safer bets.

That’s why, when Fox brought a slate of creator-led programs to Tubi, it cast a wide net by working with a diverse array of partners. The continuation of the Tubi for Creators program shows that Fox’s dealmaking has unlocked palpable opportunities for social media standouts.

Other Tubi experiments have included social shopping programs and lower-cost Super Bowl ads. By acquiring Roku, Fox can bring new dimensions to its streaming strategy. If Murdoch wants, he can work some FAST initiatives into the gameplan, too.

One thing’s for sure: Whether through Tubi or Roku or both, Fox has big plans for its streaming future. In past editions of its quarterly earnings calls, Fox has highlighted Tubi’s profitability and stated its intention to bring more programming to that app. Something tells me that The Roku Channel is due for a wave of fresh originals, too.