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Roku Inc. and Fox Corp. reached a distribution deal late Friday, narrowly avoiding a blackout that would have removed Fox apps from the Roku streaming platform ahead of the Super Bowl.
The tense standoff between the companies was the latest of a growing number of battles between channel owners and streaming-device manufacturers. These are the streaming-era version of the pay-TV carriage disputes that have sometimes resulted in channel “blackouts” when a pay-TV provider drops a channel, leaving its subscribers with no way to watch it. In the streaming era, these disputes can hinge on terms such as how the programmer and streaming platform will split ad revenue, subscription revenue or whether the streaming box will receive a so-called bounty for new subscribers who sign up through the platform.
It isn’t known what is in the distribution agreement between Fox FOX, -0.36% and Roku ROKU, -7.42% , and both companies declined to provide specifics.
The stakes were high in the fight since Fox is airing the Super Bowl. Before the breakthrough in negotiations, the companies looked to be on a collision course. A Roku spokeswoman said Friday morning that the company had offered Fox an extension but that it had been declined, and that once the deal expired Roku would no longer have the legal right to distribute Fox’s content.
Roku’s move prompted a rebuke from Fox. “Roku’s tactics are a poorly timed negotiating ploy, fabricating a crisis with no thought for the alarm it generated among its own customers,” the company said in a statement. Fox and The Wall Street Journal’s parent, News Corp, share common ownership, and Fox, according to a spokeswoman, owns a stake in Roku of about 5%.
In the end, the companies came back to the table and hammered out a deal.
Disputes between streaming-video distributors and content providers are becoming increasingly frequent in the era of cord-cutting, highlighting the complicated and sometimes tense relationships between both sides.
Last fall Amazon.com Inc. AMZN, +7.38% and Walt Disney Co. DIS, +0.36% were at loggerheads over terms for carrying the entertainment giant’s apps in Amazon’s Fire TV devices before they reached a deal in November. Amazon was pushing for the right to sell a substantial percentage of the ad space on Disney apps.
Los Gatos, Calif.-based Roku started making set-top boxes more than a decade ago to stream Netflix movies. Today it has numerous content partners, and dominates the market for streaming-media devices with a share of more than 40%, according to Strategy Analytics.
Roku, Amazon’s Fire TV, Apple Inc.’s Apple TV AAPL, -4.43% and other companies offering set-top boxes or plug-in “sticks” have become vital hubs for reaching consumers who stream media, and are increasingly playing the role cable companies have played in traditional television.
For years, cable providers have worked out arrangements with TV channels to carry networks. The channels get a portion of consumers’ monthly cable fees, and the cable providers often get access to a portion of the ad time on the networks. Likewise, the new-era streaming distributors have their own requests when they negotiate carriage of streaming apps, such as a portion of the content company’s advertising or subscription revenue.
Unlike U.S. cable operators, which cover a specific geographic footprint, streaming services and live-TV apps can distribute their programming nationwide through a number of set-top box players.
To view content through some Fox apps on Roku, users first need to log in using their pay-TV provider credentials, though the Super Bowl would be made accessible to everyone free of charge, a Fox spokeswoman said. IIf the Fox apps were removed from Roku, viewers could have still watched the San Francisco 49ers and the Kansas City Chiefs in the Super Bowl through their pay-TV provider or using the Fox website.
Cord-cutters can also stream the game through any of the many live-TV services with apps on Roku, such as those from Disney-owned Hulu + Live TV, Alphabet Inc.-owned YouTubeTV, Dish Network Corp.’s Sling TV or FuboTV or in the National Football League app, as Roku told users in an email Thursday.
