Roku stock pops on multiyear deal with Google to keep YouTube on the streaming platform

Roku shares rose 18% on Wednesday after the company announced that it had secured a multiyear deal with Google to maintain YouTube and YouTube TV on its streaming platform.

With the agreement, the 56.4 million active Roku accounts will be able to continue watching YouTube and YouTube TV, Google’s livestreaming service, without interruption.

On December 9, Google threatened to remove both YouTube and YouTube TV from Roku. The carriage fight drew the attention of Congress, which has been working to limit the power of large internet corporations such as Google.

“We’re happy to share that we’ve reached a deal with Roku to continue distributing the YouTube and YouTube TV apps on Roku devices,” said Mariana De Felice, a YouTube spokesperson. ”This means that Roku customers will continue to have access to YouTube and that the YouTube TV app will once again be available in the Roku store for both new and existing members. We are pleased to have a partnership that benefits our mutual users.”

The agreement prevents a YouTube shutdown, which may have resulted in massive Roku consumer defection. YouTube is available on Amazon Fire TV and Apple TV, among other competitors.

In a statement, Roku said, “Roku and Google have agreed to a multi-year extension for both YouTube and YouTube TV.” “This agreement represents a positive development for our shared customers, making both YouTube and YouTube TV available for all streamers on the Roku platform.”

The agreement’s terms were not made public.

Roku and YouTube’s negotiations were tense due to both parties’ desire for advertising revenue. In each carriage deal that Roku negotiates, it requests a percentage of advertising inventory to sell to its customers. YouTube, the world’s second most visited website, dominates streaming viewing and has the clout to defy Roku’s requests. Roku alleged that Google forced them to prioritise YouTube content in its search results over that of other sources.

In an October statement backing Roku, Sen. Amy Klobuchar, D-Minn., stated, “For too long, the big tech platforms have leveraged their power to preference their products and services over those of thousands of smaller online businesses.” “They have said ‘just trust us,’ but experience has shown that we can’t rely on these companies to act fairly in the marketplace.”

Despite this, Roku has earned a reputation as a tough negotiator. Months after each streaming app’s public launch, it signed agreements with NBCUniversal’s Peacock and WarnerMedia’s HBO Max.