Are Netflix's Price Hikes Good News for Roku Investors?
Key Points
Netflix subscribers in the U.S. just got hit with $1 or $2 price increases, depending on the plans they sign up for.
Roku, which generates revenue from advertising inventory it controls on its platform, can gain if viewers choose ad-supported tiers.
With Roku shares trading significantly off their peak, investors should consider buying the dip.
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One of the best stocks of this century has been Netflix, without a doubt. Its shares are up almost 26,000% in the past two decades (as of April 10). This kind of exceptional gain comes on the back of robust fundamental performance, driven by ongoing subscriber gains and strong revenue and profit growth.
A key part of Netflix's impressive success is pricing power. And just last month, the business raised prices for U.S. customers. The price hikes ranged from $1 to $2 depending on the plan. Netflix believes that since it spends so much on content and provides significant value to viewers, it can consistently ask its members to pay more.
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Is this strategic move by Netflix good news for Roku (NASDAQ: ROKU) investors?
Image source: Getty Images.
Focusing on the impact to advertising
According to research from The Motley Fool, more than 60% of consumers believe there are too many streaming options. This reveals Roku's value proposition, as its platform aggregates these different subscriptions in a single interface. Netflix is one of the streaming services that's compatible with Roku.
I believe the biggest way that Netflix's latest price hike can benefit Roku's business comes down to advertising. Roku's platform segment, which accounted for 87% of its total revenue in 2025, is its main financial engine. One of the ways it makes money is by controlling the ad inventory, typically 30%, from its streaming partners. And it keeps all the revenue from this.
If Netflix's price increase forces more subscribers to opt in for the cheaper ad-supported tier, then it can potentially give Roku a tailwind to report more revenue over time.
Additionally, this same dynamic can encourage consumers to spend more time on The Roku Channel. This is a free, ad-supported streaming service that is fully owned by the company. Again, it can help Roku make more money from advertising on its platform.
And for people seeking an ad-free experience, Roku's Howdy ($2.99 per month) service can be enticing. Roku offers this as a stand-alone app.
Of course, Netflix is just one of many different content providers that are available on Roku. This suggests that the former's ongoing price increases will likely have a minimal impact on the latter's financial situation.
Should you buy Roku stock?
At the end of the day, Roku shareholders should keep their attention on the big picture, not what one streaming company does with its pricing. Roku is positioned well in the streaming landscape. "Nearly half of all TV streaming in the U.S. happens on the Roku platform," founder and CEO Anthony Wood said on the fourth-quarter 2025 earnings call.
So, Roku is benefiting from the overall streaming industry growing its viewership and ad dollars steadily shifting to connected TV, both powerful trends. With the streaming stock trading 79% below its peak, it might be time for investors to consider buying Roku today.
Should you buy stock in Roku right now?
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Roku. The Motley Fool has a disclosure policy.
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