The YouTube TV app may be disappearing from streaming-TV platform company Roku (NASDAQ:ROKU), according to a reported communication today from the platform to its users. Roku claims that YouTube’s parent, Google, itself a subsidiary of Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), is proposing an agreement with unfair terms. This has stalled ongoing negotiations between the two companies.
Roku bemoaned Google’s attempt to wield its so-called “monopoly power” for a deal that would allegedly harm Roku’s users. But Roku’s willingness to allow YouTube TV to leave its platform may ultimately demonstrate who actually has the upper hand in the streaming-TV wars.
This isn’t the first time that Roku’s negotiations have deteriorated. Last year, it had a similar issue with NBCUniversal, a Comcast company, over its streaming channel Peacock. When Peacock first launched, it wasn’t available on Roku. Negotiations fell apart and it appeared all NBC properties would ultimately be pulled from the platform. In the end, however, the two reached what Roku called a “mutually beneficial agreement.”
Ultimately, it appears NBC caved in to some of Roku’s terms, suggesting the latter holds substantial bargaining power in the streaming-TV space. And with over 51 million active Roku accounts, it’s easy to see how this might be the case.
Lastly, it’s important to note that Roku competes directly with Google’s Chromecast platform, but Roku is far ahead. According to a recent study by Pixalate, a programmatic ad monitor, 49% of all programmatic streaming-TV ads flow through Roku’s platform. For comparison, Chromecast has just 2% market share. This disparity may explain why the two sides are struggling to come to terms on an agreement for YouTube TV for now.
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