Roku on Monday notified its users via email that YouTube TV may be forced off its platform entirely, alleging anti-competitive demands from Google that include requests for preferential treatment of its YouTube TV and YouTube apps.
Why it matters: It's one of the first big carriage disputes around anti-competitive behavior in the streaming era. Unlike most streaming TV carriage fights, Roku says it's not asking for more money, but for better terms around anti-competitive demands from Google — such as being asked to favor Google products in Roku search results.
- Roku and Google compete on a number of fronts, including smart TV hardware devices, smart TV operating systems and smart TV content.
- The carriage agreement between the two companies is set to expire imminently.
Details: Roku says Google is threatening the removal of YouTube TV to force Roku to grant preferential access to its consumer data moving forward.
- It says Google has asked Roku to do things that it does not see replicated on other streaming competitors' platforms, like creating a dedicated search results row for YouTube within the Roku smart TV interface and giving YouTube search results more prominent placement.
- Roku says Google has also required it to block search results from other streaming content providers while users are using the YouTube app on Roku's system.
- Roku alleges Google has asked it to favor YouTube music results from voice commands made on the Roku remote while the YouTube app is open, even if the user's music preference is set to default to another music app, like Pandora.
- Roku says Google has threatened to require Roku to use certain chip sets or memory cards that would force Roku to increase the price of its hardware product, which competes directly with Google's Chromecast.
In response to the allegations, a YouTube TV spokesperson says, “We have been working with Roku in good faith to reach an agreement that benefits our viewers and their customers."
- "Unfortunately, Roku often engages in these types of tactics in their negotiations. We’re disappointed that they chose to make baseless claims while we continue our ongoing negotiations."
- "All of our work with them has been focused on ensuring a high quality and consistent experience for our viewers. We have made no requests to access user data or interfere with search results. We hope we can resolve this for the sake of our mutual users.”
Be smart: A key issue for Roku — other than that Google is asking it to manipulate search results that favor Google's products — is that it believes Google is trying to tie the renewal of YouTube TV's distribution contract with Roku to force additional anticompetitive benefits for Google's separate YouTube app.
The big picture: The allegations come amid historic antitrust investigations into Google by the Justice Department, state attorneys general and Congress over Google's dominance in search and advertising.
- "Google is attempting to use its YouTube monopoly position to force Roku into accepting predatory, anti-competitive and discriminatory terms that will directly harm Roku and our users," a Roku spokesperson says.
- "Roku is not asking Google for a single additional dollar in value. We simply cannot agree to terms that would manipulate consumer search results, inflate the cost of our products and violate established industry data practices."
Between the lines: A Roku spokesperson says Google has "so far refused to accept" its proposal to extend YouTube TV on Roku while agreeing to its terms. Roku says the company is ultimately seeking to reach an agreement with Google.
What to watch: Roku's stalemate with Google is the latest in a long list of spats between streaming TV distributors and streaming networks over distribution agreements.
- For consumers, it means that the programming blackouts that have grown increasingly common on cable and satellite TV are migrating over to the streaming world.
Read Roku's email to customers:
Go deeper: TV battles spill into streaming