Jordan Bevan
Roku has announced the acquisition of low-cost streaming service Frndly TV for $185 million. The strategic purchase—expected to close in the second quarter of 2025—comes as Roku continues to emphasize platform revenue growth through subscriptions and advertising, even as it navigates macroeconomic uncertainties, including potential tariff pressures and evolving advertiser demands.
Frndly TV, founded in 2019 and headquartered in Denver, Colorado, delivers live TV, on-demand video, and unlimited cloud-based DVR at an industry-leading price point starting at $6.99 per month. With more than 50 live channels including Hallmark Channel, A&E, The History Channel, and Lifetime, Frndly has carved out a niche among value-conscious families seeking wholesome entertainment. Its entire leadership team, including co-founder and CEO Andy Karofsky, will remain on board following the acquisition.
“Frndly TV’s rapid growth and customer-first approach align perfectly with Roku’s mission,” said Roku founder and CEO Anthony Wood. “This acquisition supports our long-term strategy of increasing Roku-billed subscriptions and strengthening our live content offering for consumers.”
The Frndly deal was announced alongside Roku’s first-quarter earnings, which showed a 16% year-over-year revenue increase, totaling $1.02 billion. Despite surpassing analyst expectations, the company’s Q2 revenue guidance of $1.07 billion fell slightly short of forecasts, leading to a modest 5% drop in after-hours trading.
Platform revenue—which includes advertising and subscriptions—grew 17% year-over-year to $880.8 million, highlighting Roku’s continued emphasis on ad-supported services. Meanwhile, Devices revenue increased by 11%, though the company expects a 10% year-over-year decline next quarter due to possible tariff impacts.
Still, Roku remains bullish on its advertising prospects. The company has been expanding its programmatic offerings and self-serve ad platform, Roku Ads Manager, which allows for both direct insertion orders and biddable programmatic deals. According to Roku Media President Charlie Collier, advertisers are increasingly favoring programmatic buying models that provide the flexibility required in today’s unpredictable environment.
“What used to be quarterly planning can now be as short-term as weekly,” said Collier. “We’re seeing an industry-wide shift away from guaranteed buys toward more agile, performance-driven campaigns. Roku is well-positioned to capture that momentum.”
As part of its advertising strategy, Roku is also leveraging new home screen ad formats, including content recommendation widgets and autoplay video placements, despite some backlash from users. These formats have reportedly driven significant subscriber growth to the Roku Channel, which saw an 84% global increase year-over-year.
The company also emphasized its investment in enhancing audience authentication, improving data interoperability with demand-side platform (DSP) partners, and attracting more small- and medium-sized advertisers through tools like Roku Ads Manager. These initiatives are unlocking new revenue streams and deepening relationships with existing clients.
Despite short-term headwinds, Roku remains optimistic about its long-term trajectory. With nearly 90 million streaming households and expectations to cross the 100 million mark soon, the platform sees ample room for growth. “We remain confident in our strategy and continue to see a path to achieving positive operating income by 2026,” Wood and CFO Dan Jedda told shareholders.
While Roku contends with external challenges, including a recently filed child privacy lawsuit by Michigan’s attorney general—a claim the company “strongly disputes”—its strategic focus on subscription expansion and ad-tech innovation positions it to remain a key player in the ever-evolving connected TV space.
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