This is somewhat accurate. The Netflix Player was an internal Netflix project. Close to launch, Hastings realized that other device makers would balk at Netflix making their own hardware, so it became a Roku product. [1] Most articles I've seen about this say Netflix spun off Roku, but like you I remember they definitely existed as a company before that. Did they simply just transfer that whole department to Roku? Did they have any kind of relationship before that? It's a little murky.

[1] https://www.fastcompany.com/3004709/inside-netflixs-project-...