Roku and Google bury the hatchet

Roku and Google have found common ground, striking a new multiyear deal that will keep the baseline YouTube service and the YouTube TV service on Roku's streaming platform.

Financial terms were not disclosed, but the deal comes together just prior to a December 9 deadline that would've kept YouTube off of newly purchased Roku streaming players and Roku TVs.

Figure 1: The new deal keeps YouTube on Roku's streaming platform.
(Image source: Roku Channel Store)

Getting a deal done before that deadline was critical for Roku. Roku, which has about 56.4 million active accounts, is in the midst of the holiday buying season and competing in a competitive market against a group of rival streaming platform providers that includes not only Google, but Amazon's Fire TV, Apple (tvOS), TV makers such as Samsung, LG Electronics and Vizio, and even Comcast, which has gotten into the game with its new family of XClass TV products.

Roku trumpeted the new agreement on Twitter:

Roku shares surged $20.61 (+9.52%) to $237.21 each in Wednesday morning trading on the news. Update: Roku shares closed today up $39.48 (+18.23%) to $256.08 each.

The new deal enters the picture more than six months after a distribution deal between Roku and YouTube TV had lapsed (Google ended up creating a technical workaround for that), and just a day before it was possible that the main YouTube app would become inaccessible to new Roku devices.

Talks grew contentious on both sides during that multi-month period. Roku had claimed that Google was interfering with Roku's "independent search results" and requiring that Roku preference YouTube over other content providers, and that "Google discriminates against Roku by demanding search, voice, and data features that they do not insist on from other streaming platforms." Google, meanwhile, held that Roku was making "unproductive and baseless claims" rather than engaging in constructive talks.

The situation became heated enough to grab the attention of the US government and provided more grist for the proposed American Innovation and Choice Online Act, which aims to prevent dominant digital platforms from abusing their market power to harm competition, online businesses and consumers.

Amid the earlier standoff, US Senator Amy Klobuchar (D-Minn.), who is also chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights, issued a statement in October arguing that new laws were needed to "prevent dominant digital platforms from abusing their power as gatekeepers" as it became clear that the companies themselves couldn't be trusted to "act fairly in the marketplace."

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— Jeff Baumgartner, Senior Editor, Light Reading