Image by: Getty Images, Roku, DataXu
Over-the-top media services (OTT) are a growing form of media consumption platforms that offer users the ability to stream media directly over the internet. OTT media service giants such as Amazon Fire TV and Roku have competed to be the top platform for years in a growing world of streaming consumption.
Roku recently has shocked the industry buying the DSP, Dataxu, a marketing company that helps media professionals use data to improve their advertising. Dataxu goes off their company mission which is “Our software empowers you to connect with real people across all channels, including TV, capturing consumers’ attention when and where it matters most” (Dataxu)
The deal between the merger consisted of a 150 million in cash/stock deal. Roku intends with this deal to be able to use the data/marketing company to better be able to compete with other major OTT platforms like Amazon Fire TV who currently claims north of 34 million users. Roku has around 30.5 million users as of the summer of 2019, but one key feature has set Amazon Fire TV and Roku apart. Amazon currently has its own Demand-side platform (DSP) which is a system that allows buyers of digital advertising inventory to manage “multiple ad exchange and data exchange accounts through one interface” (Wikipedia).
As Amazon Fire TV has begun to allow video publishers to sell advertising through their own DSP, Roku hopes to use their newly acquired DSP, Dataxu, as a media-planning tool to help optimize their business outcomes since the software provides marketers with an automated self bidding, and self-serve platform for managing advertising campaigns.
Roku will not only now be able to compete more strongly with other OTT media services with Dataxu as as Demand-side platform to help them drive their number of users, but also receive profit from Dataxu’s current users all over the world.
Acquisitions such as these put an emphasis on the idea of media convergence as well as the importance of media companies to be innovative and involved in marketing/advertising technology, an area in which most of these giants make their revenue off of. Instead of integrating their own Demand-side platform like Amazon, Roku raised the stakes of the game by buying one to not only help their growing media service platform, but increase company profit/share in the technology realm significantly.