Roku announced the acquisition of the “This Old House” business which will support its growing advertising-supported video on demand (AVOD) service. The acquisition includes a 1500+ episode library of “This Old House”, a production studio, 2 ongoing series and related digital assets as well as global distribution rights.
Roku’s (ROKU) VP of Programming, Rob Holmes said, “As the top-rated home improvement programs in America, ‘This Old House’ has the broad appeal that is perfectly suited to support the Roku Channel’s ad supported growth strategy. ‘This Old House’ created the television home improvement genre and is beloved by millions of fans. We are thrilled to welcome this incredible team, and we could not be more excited to help grow the brand for an entire new generation of home improvement enthusiasts.”
Dan Suratt, CEO, This Old House Ventures said, “The passion of the craftspeople on ‘This Old House’ is matched only by its viewers, and we take great pride that over the past four decades we have helped them improve their most valuable asset – their home.”
Suratt further added, “Roku is not only the No. 1 TV streaming platform in America, it also represents the future of TV, and we could not think of a better home for ‘This Old House’ to grow and to continue its leadership position in the home improvement genre.”
According to Nielsen data, “This Old House” and “Ask This Old house” were the top rated home improvement programs in the U.S. in 2020. The shows have won 19 Emmy awards and 102 nominations.
Roku plans to provide access to the shows’ content via different mediums and build on the brand by expanding productions as well as distribution of these shows.
Notably, The Roku Channel witnessed a doubling of streaming hours and audience in the past year. The increase in size allows the company more creative and expansive sourcing strategies that are better suited to its advertising supported video on demand (AVOD) business model. (See Roku stock analysis on TipRanks)
On March 12, Rosenblatt Securities analyst Mark Zgutowicz reiterated a Buy rating on the stock and maintained a price target of $560 (61% upside potential). Commenting on the series premiere of “Cypher” on Roku, Zgutowicz said, “While this series itself will likely not blow the doors off the Roku Channel’s viewership, just 3 months after the Quilbi license suggests exclusives are now a key element of TRC strategy.”
Turning to rest of the Street, the stock has a Moderate Buy consensus rating alongside an average analyst price target of $480.10 (38.2% upside potential) based on 13 Buys, 6 Holds and 1 Sell. Shares have rallied about 369% over the past year.
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