A new front has been opened in the streaming distribution battle between NBCUniversal and Roku.
Stemming from an impasse centered on NBCU's new Peacock premium streaming service, which remains a no-show on Roku's platform, dozens of NBCU apps – including app for NBC stations, cable networks and Telemundo stations – could be yanked from Roku's platform as early as this weekend.
NBCU's distribution deal with Roku for the programmer's TV Everywhere apps expired at the end of August. Roku and NBCU have been extending that deal on an ad hoc basis since then while the Peacock-related discussions continued, but it appears that another extension is not forthcoming.
Update: It's possible that the sides could bury the hatchet soon. NBCU and Roku are "very close" to signing a new deal, a person familiar with the situation said Friday afternoon.
Roku warned customers of that possibility in an email message sent Friday, noting that it asked Comcast to extend its existing deal for NBCU's TV Everywhere apps (access to such apps require a pay-TV subscription). Roku wants that deal to continue on an as-is basis as the sides work toward a distribution deal for Peacock, an NBCU OTT service launched nationally July 15 that now counts about 15 million sign-ups and has forged deals with several other major streaming platforms, including Google (Chromecast, Android and Android TV), Amazon (Fire TV) and Apple (tvOS and iOS).
"While these NBC TV Everywhere apps represent a very small number of streaming hours on our platform, we believe they are convenient to people who use them, especially when so many Americans are at home," Roku told its users.
NBCU, of course, has a different take, holding that it's Roku that is removing access and attempting to drive "unreasonable demands."
"We are disappointed Roku is removing its users' free access to NBCUniversal programming – 11 network apps, 12 NBC Owned Station apps, 23 Telemundo Owned Station apps – and continues to block access to the only free premium streaming service available in the market, Peacock," an NBCU spokesperson said in an emailed statement. "Roku's unreasonable demands ultimately hurt both their consumers and their consumer equipment partners to whom they've promised access to all apps in the marketplace."
Even if NBCU's apps are pulled, Roku users can still get NBCU channels via other means on Roku's platform, including Comcast's Xfinity Stream app and apps from other pay-TV providers such as Charter Communications and AT&T, as well as from virtual multichannel video programming distributors that include Hulu, Sling TV, YouTube TV and fuboTV.
This latest skirmish ties back to ongoing discussions between NBCU and Roku involving Peacock, a service with three tiers – an ad-free premium offering for $9.99 per month; an ad-supported premium tier for $4.99 per month (both with 20,000 hours of programming; and a completely free, ad-based version featuring 13,000 hours of content).
According to people familiar with the situation, the standoff centers on advertising, with Roku wanting Peacock to provide content for The Roku Channel (a service that provides free, ad-supported fare from multiple content partners) as well as ad inventory on the Peacock streaming service itself and some integration of Roku's ad-tech on Peacock's platform.
The advertising demands are a "major sticking point" for Peacock, which, at just five minutes of advertising time per hour, doesn't have gobs of ad time to share, the person said. That same type of issue is also holding up distribution on Roku of HBO Max, which is preparing to launch an ad-supported version of the OTT service next spring.
A person familiar with the talks said that Roku has inserted more asks and demands even as Roku and NBCU inched close to clinching a new deal. "They keep moving the goal posts," and making demands that are far beyond the terms that other top streaming platforms have sought, the person said. Another industry source familiar with the talks said areas of the proposed deal being contended have not changed for months.
Roku has previously countered that Comcast is attempting to launch a primarily ad-driven streaming service without sharing ad revenues with platform providers that will help drive Peacock to the masses.
Update: Roku said its extension offer was rebuffed, claiming that Comcast/NBCU has refused to come to "fair and equitable" terms for the distribution of Peacock, and that Peacock stands to generate "hundreds of millions of dollars" in ad revenue from its distribution on the Roku platform.
"In business terms, Comcast wants to build a large ad-supported service on the Roku platform and keep all of the ad economics for themselves," Roku said in a statement. "They have offered no certainty that Roku will have the opportunity to earn any material ad economics. What's reasonable about that? Sharing in partner success and the upside we create is how we fund innovation, new products and advanced ad products – that's why this is important. We are committed finding a win-win deal and are confident we can help Comcast make the transition to streaming by making Peacock a success."
This isn't the first time that Roku and a major programmer have engaged in a battle as distribution deals expired. A brief, high-profile fight occurred in January between Roku and Fox ahead of Super Bowl LIV, but was resolved just before the Big Game.
Comcast eyes broader streaming platform market
Another wrinkle is Comcast's plan to broaden the reach of its X1 technology in a way that could put it in more direct competition with Roku and other streaming platforms.
Speaking at an investor conference this week, Comcast Chairman and CEO Brian Roberts confirmed that the company is exploring a plan to deploy its video tech stack to smart TVs across the globe. In addition to its own streaming players, Roku's operating system powers several TV models from companies and brands such as TCL, Hisense, Sharp, JVC, RCA, Hitachi, Magnavox and Westinghouse.
"We're early days, but we're looking at smart TVs on a global basis, and we're wondering – can we bring our same tech stack for certain capabilities in [content] aggregation to consumers who are relying more and more on smart TVs?" Roberts said.
While Roberts's comments centered on a smart TV strategy, Comcast is also making some progress in its own cable footprint with Xfinity Flex, a smart home/streaming service being marketed to Comcast's broadband-only customers. There's some speculation brewing that Comcast could try to sell Flex out of footprint with apps that have national digital distribution rights, a group that includes Netflix, Amazon Prime Video, Sling TV, Spotify, Pluto TV and Comcast-owned Xumo, among others.
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— Jeff Baumgartner, Senior Editor, Light Reading