Fox Corporation is buying Roku, a popular streaming platform, for $22 billion, according to CNBC and The Hollywood Reporter. Roku shareholders will be paid $160 per share using a combination of cash and Fox stock.

The price is higher than what Roku's stock has been worth recently, and at $22 billion, it is one of the biggest deals in the media business this decade.

What Fox Gets

When you turn on a smart TV, Roku is often what you see first. Roku is the software and hardware that powers the interface—the home screen where you choose between Netflix, Disney+, and other services. Tens of millions of people in the US have Roku on their TVs.

Owning Roku gives Fox something valuable: control over how streaming services appear on those screens and the ability to collect data about what people watch. Fox already owns Tubi, a free streaming service. Owning Roku means Fox could favor Tubi on the home screen and use Roku's data to sell advertising.

Fox also owns sports and news—the NFL, NASCAR, and a news channel. These attract viewers who are willing to watch ads. Roku has advertising technology that connects advertisers with viewers. If Fox combines its sports content with Roku's advertising tools, it can sell expensive ad slots to advertisers. Think of it as owning both the content and the store that sells it.

The Regulatory Question

Government agencies will review this deal to make sure it does not harm competition. Right now, Netflix, Disney+, and other services rely on Roku being fair to everyone. If Fox owns Roku and favors its own services, that could be a problem for competitors.

Regulators have dealt with this issue before, when cable companies owned both TV channels and the pipes that delivered them to homes. They may require Fox to promise not to give unfair advantages to its own services.

What Happens Next

Other platforms that put streaming services on TVs—like Amazon Fire TV and Google TV—will have to think about their strategy. If Roku becomes just another arm of Fox, streaming services may try harder to reach viewers directly, without relying on any platform.

For Fox, this bet assumes that owning the TV screen itself is more valuable than just licensing space on someone else's screen. That strategy sometimes works and sometimes creates problems that cost more than the deal was worth. Whether this deal actually closes, and what rules regulators impose, will tell us how the government sees the future of media ownership.