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Roku’s ‘neutral platform’ days are now over

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Roku’s ‘neutral platform’ days are now over

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Roku got far in the streaming wars by framing itself as a neutral party. With its inexpensive, straightforward streaming devices that practically anyone could publish on, Roku became a hit with cord-cutters and a valuable platform for content providers.

“We are a neutral OTT platform, making us an attractive partner,” Roku told shareholders last year. “We do not focus on competing with content publishers on our platform, but instead, look to partner with publishers to build their audiences and maximize our mutual success.”

It’s an image that Roku’s been shattering lately as it butts heads with publishers like AT&T’s WarnerMedia and Comcast’s NBCUniversal. HBO Max remains unavailable on Roku nearly two months after launch, and NBCUniversal launched Peacock without Roku support last week.

These disputes are happening precisely because Roku isn’t being neutral anymore. Instead, it’s competing with publishers through its own ad-supported app and pressuring them to participate in its own subscription marketplace. Roku is only neutral in the narrow sense that it doesn’t make its own content, though the company has reportedly kicked the tires on that as well.

Roku is of course entitled to profit off the wildly popular platform it’s built. But as cord-cutters shop for new streaming devices and smart TVs, they must now realize that Roku’s revenue targets have taken precedence over unparalleled app support.

HBO Max and Peacock: The story so far

The reasons for Roku’s ongoing broyges with WarnerMedia and NBCU are well-documented at this point. As Variety’s Todd Spangler reported last week, Roku wants to keep selling HBO subscriptions through its Roku Channel store, while WarnerMedia wants subscriptions to flow exclusively through HBO Max. Roku is also reportedly pushing for “extras” as part of its deals with both WarnerMedia and NBCU, including free content for the Roku Channel and agreements to pay for promotion on Roku’s platform.

For Roku, funneling HBO subscriptions through the Roku Channel has many benefits, including a cut of subscription revenues, greater insight into users’ viewing habits, and the chance that users will stick around to watch ad-supported content. WarnerMedia wants more of that control for itself, and while Matthew Keys has reported that WarnerMedia offered Roku the chance to sell subscriptions in exchange for a lower revenue cut, Roku refused.

rokupremiumRoku

The Roku Channel has become central to Roku’s business plan—and a source of discontent for content owners.

Roku isn’t the only one using its market power to push content providers around. Amazon is having similar disputes with WarnerMedia and NBCUniversal, which to date haven’t launched Fire TV versions of HBO Max or Peacock respectively. (Though tech-savvy users can sideload those apps instead.) Amazon, however, hasn’t been promoting itself as a neutral party in interviews and shareholder letters. While we expect Amazon to prioritize its own Prime and IMDb TV content on Fire TV devices, Roku has built its brand around openness.

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