Data: Nielsen; Chart: Axios Visuals

Fox's $22 billion deal to buy Roku marks a turning point in the streaming wars and a new era for the Murdoch media empire.

Why it matters: Streaming is no longer a paid subscriber race, but rather an opportunity for entertainment giants to accelerate other parts of their businesses where they have a competitive edge against Netflix.

For Apple, Amazon, Disney and Comcast/NBCUniversal, that means selling devices, e-commerce subscriptions, parks/movie tickets and broadband, respectively.
For Fox, it means bringing more eyeballs to its live programming and selling more digital TV ads.

How it works: The merger would make Fox the owner of the top digital TV operating system in the U.S.

Fox could promote its content and apps to the 100 million global households that subscribe to Roku. It would have global distribution to leverage in sports rights deals.
The deal would also see Fox owning one of the largest advertising video on-demand networks, The Roku Channel, that combined with its AVOD network Tubi would create a digital ads behemoth.
For Roku, the deal offers an exit at a notable premium from its typical trading price as it continues to face serious competition from well-funded tech giants like Amazon and Google.

Zoom out: The agreement represents the biggest bet made by Lachlan Murdoch since he was named Fox's chairman and CEO in 2019.

Fox never tried to compete in the subscription streaming wars, focusing instead on its free streaming alternative Tubi.
For years, that strategy won over investors, who rewarded the company for its discipline and focus. But in recent months, analysts have grown concerned about whether Fox's focus on live programming leaves it vulnerable to distribution negotiations with the NFL.

Reality check: The acquisition of Roku marks a landmark shift for Fox, broadening its focus from content to distribution. But it's a risky bet.

Fox shares plunged following the news, as investors grappled with the possibility of stock dilution and what it would mean for the company to manage a low-margin hardware business.
Roku's value also stems from its neutrality across content providers, and that could face pressure under Fox's ownership.

The big picture: Most companies have accumulated lots of debt trying to scale their streaming networks.

Fox, which sold its legacy entertainment assets to Disney in a $71 billion deal in 2019, has been sitting on a pile of cash for years, waiting for the right moment — and asset — to pounce.
The deal, which will be financed through a mix of cash and stock, would not have been possible if not for Fox's disciplined strategy and healthy balance sheet, Murdoch told investors.