Roku (ROKU) - Get Roku, Inc. Class A Report traded higher on Monday following a report that the popular steaming-media provider was in advanced talks to purchase the short-from content catalog of high-profile but failed Quibi.
The Wall Street Journal reported Roku was in advanced talks to buy Quibi's content catalog as the short-form streaming service winds down its operations.
Under the terms the companies have discussed, Roku would acquire rights to Quibi’s library, people familiar with the matter told the Journal. Financial terms of the proposed deal couldn’t be learned. The deal talks could still fall apart.
Quibi, which was founded by movie mogul Jeffrey Katzenberg and led by former Hewlett-Packward CEO Meg Whitman, raised $1.75 billion with an ambitious plan to develop high-end content for mobile phones. But the service, which launched in April, never gained traction.
Roku, which sells the most popular streaming-media player in the U.S., has been pushing aggressively into content with its own ad-supported app, the Roku Channel, which offers movies and shows produced by other companies. A deal with Quibi would give Roku a roster of exclusive programming, the Journal said.
Despite the global pandemic and surge in demand for online entertainment, Quibi shuttered after just six months, “Likely for one of two reasons: because the idea itself wasn't strong enough to justify a standalone streaming service or because of our timing,” Whitman and Katzenberg wrote in a letter in October.
“Unfortunately, we will never know but we suspect it's been a combination of the two.”
Quibi's focus was on short-form but high-quality shows that would be consumed on the go on peoples' mobile devices. Among the 10-minute shorts in its library: “Most Dangerous Game,” a thriller about human-hunting; “Dummy,” a series about a talking sex doll; and “Murder House Flip,” a fusion of home-improvement programming and true-crime shows.
Shares of Roku were down 1.43% at $327.26 in trading on Monday after gaining nearly 4% in premarket trading.