What happened
Shares of Roku (ROKU +0.22%) are running 4.5% higher Tuesday morning at 10:29 a.m. ET after the streaming video platform came to an agreement with Warner Bros. Discovery (WBD +0.09%) to bring the studio's branded free, ad-supported TV (FAST) channels to the Roku Channel. Among the titles coming are Westworld, The Bachelor, Cake Boss, and Say Yes to the Dress.
Additionally, Roku and Warner Bros. have agreed to license some 2,000 hours of the studio's on-demand library programming, including hundreds of TV series and movies from HBO, HBO Max, Discovery Channel, HGTV, and Food Network.
Image source: Getty Images.
So what
FAST is reportedly the fastest growing segment of TV viewing and is expected to surpass cable sooner rather than later.
Where Warner Bros. Discovery had previously reserved its content for its paid streaming services such as HBO Max, a $1.4 billion loss over the first nine months of 2022 has convinced the movie studio it needs to embrace ad-supported viewing content.
Although Warner Bros. subscriber rolls have grown to nearly 95 million subscribers, that's less than half of the numbers Netflix and Disney have reported.
NASDAQ: ROKU
Key Data Points
Now what
Roku's vice president of programming, Rob Holmes, said in a statement, "The rapid expansion of premium content on FAST is a win for both the viewer and content owner, as well as advertisers looking to reach these audiences through well-known programming."
Roku is becoming a go-to destination for FAST content, having signed over the past year deals that add programming from AMC Networks, NBCUniversal, and the National Hockey League.
Roku notes that the Roku Channel was a top-five channel in reaching active accounts and the amount of engagement they had with Roku in the third quarter. Roku was also first in U.S. ad-supported video on-demand content as well as FAST services.
