The ongoing negotiations between NBCUniversal and Roku over the distribution of streaming service Peacock have gotten combative.
Two sources involved in the talks tell The Hollywood Reporter that the latest round of talks fell apart late on Thursday night and now threaten to envelope NBCU’s TV everywhere apps, which will go dark for Roku users this weekend unless a last-minute deal is hammered out.
“We recently learned that Comcast plans to revoke consumers’ access to NBC TV Everywhere channels on the Roku platform by making Roku delete these channels on / or as early as September 18, 2020,” a Roku spokesman said in a lengthy statement on Friday morning. The company also sent a letter to its customers, informing them that “Comcast is removing these channels in order to try to force Roku to distribute its new Peacock service on unreasonable terms.”
An NBCUniversal spokeswoman countered, “We are disappointed Roku is removing its users’ free access to NBCUniversal programming — 11 network apps, 12 NBC Owned Station apps, 23 Telemundo Owned Station apps — and continues to block access to the only free premium streaming service available in the market, Peacock. Roku’s unreasonable demands ultimately hurt both their consumers and their consumer equipment partners to whom they’ve promised access to all apps in the marketplace. “
NBCU and Roku have been locked in negotiations for months over the distribution of Peacock, the ad-supported streaming service that the entertainment giant released widely in July. At the time of Peacock’s launch, it was not available on Roku or Amazon platforms because NBCU wasn’t able to strike deals with the distributors, who control around 70 percent of the connected TV market. NBCU then began as social campaign, which made use of the hashtag #FreeTheBird, to raise awareness with consumers about why Peacock was not available on those platforms.
At issue in NBCU’s talks with Roku, sources previously told THR, are points of the deal relating to how much Peacock advertising industry the company would hand over to the tech firm, which has spent the last several years building up an ad business to supplement its device sales. NBCU, the sources said, doesn’t want to give away any of Peacock’s ad inventory because it shows less than five minutes of advertising each hour. Roku has countered that NBCU has “offered no certainty that Roku will have the opportunity to earn any material ad economics.”
In the two months since Peacock’s launch, NBCU and Roku have come close to striking a Peacock distribution deal twice but haven’t been able to finalize an agreement, according one of the sources with knowledge of the talks. Amid the ongoing negotiations, NBCU’s deal with Roku over the distribution of its TV everywhere apps, which allows pay TV subscribers to stream the programming that they subscribe to via their cable bills, expired in September. The companies’ negotiations then became about not just Peacock but also the TV everywhere apps.
The standoff resembles those between cable companies and TV networks as they work through carriage disputes. Roku, which with 43 million active accounts is the leading connected TV platform, of late has asserted its position in the market. It also doesn’t have a deal to distribute HBO Max, which isn’t available on Amazon devices either.
Roku says that NBCU’s TV everywhere apps “represent an insignificant amount of streaming hours and revenue on our platform.” The company adds that it offered to extend its existing deal for the channels so that they could remain in place while a Peacock deal continues to be negotiated. “Comcast has declined our extension offer and so far has also refused fair and equitable business terms for the distribution of Peacock — despite the fact that they stand to generate hundreds of millions of dollars in advertising revenue from its distribution on the Roku platform,” reads the statement. A source says that NBCU was ready to sign a deal with Roku on Thursday evening but that the company came back with late changes that scuttled the talks.
Sources indicate that a Peacock app could quickly join Roku’s lineup of offerings if a deal can be struck. Meanwhile, the TV everywhere apps will likely go dark for consumers — and be deleted entirely from their Roku accounts — this weekend if the two parties can’t reach an agreement.