Who does the YouTube TV standoff hurt most: Google or Roku?

Roku and Google opened a new front in the streaming distribution wars with their YouTube TV dispute. Consumers will bear the brunt of the standoff if YouTube TV leaves the platform, but which company’s reputation will take the most damage?

Roku this morning warned its customers about the possible YouTube TV blackout after negotiations broke down with Google, which Roku accused of using its “monopoly power to try and force terms that will directly harm streamers.”

YouTube has since responded and said it has been working in good faith toward an agreement with Roku and refutes the company’s claims that it requested access to user data or tried to interfere with search results.

“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,” YouTube said in a statement.

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Among TMT analysts, opinions differ on who will be hurt the worst if YouTube TV (with its 3 million subscribers) exits the Roku platform (with its 51.2 million active accounts). Alan Wolk, co-founder and lead analyst at TV[R]EV, called it a foolish move all around that will seemingly hurt both equally.

“Viewers who are tied to YouTube TV will either default to their smart TV’s interface or get a $29 Amazon stick (or $49 Google one) and viewers who are tied to their Roku device will switch to Hulu Live TV,” said Wolk. “And each group of viewers will blame the less favored device for being the reason why they can’t watch YouTube TV on Roku anymore.”

Emily Groch, director of insights, telecommunications at Comperemedia, said YouTube TV will be the loser since most Roku users who subscribe to YouTube TV are probably going to be less inclined to explore a different platform or purchase other hardware just so they can stream YouTube TV.

“As such, I'm confident the two companies will reach an agreement,” she said. “In the meantime, Roku has seized the window of opportunity to call out Google for anticompetitive (and anti-consumer) practices. With the customer communications it sent today, Roku is hoping to reinforce trust with its users by outlining how it's looking out for them, while fueling negative brand perception of Google/YouTube TV.”

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Brett Sappington, vice president at Interpret, said both sides run a significant risk of being bumped for a competitive offering but said the fact that this standoff with Roku is happening soon after a price increase is poor timing for YouTube TV.

“The additional cost of replacing your Roku is almost like an additional one-time fee just to keep your pay TV service. Those unhappy about the YouTube TV price increase will likely test other vMVPD options,” he said, adding that Interpret’s data suggests that 26% of U.S. consumers claim to have a Roku device as of late 2020.

Colin Dixon, founder and chief analyst at nScreenMedia, said Roku has more at stake here given its recent standoffs with other streaming services.

“Roku users had to watch while Apple TV and Android TV users got access to HBO Max and Peacock months before they did,” he said. “The loss of YouTube TV will be another blow to Roku's reputation.”

Dixon said losing access to YouTube TV even for a day will be unacceptable to most subscribers who, rather than wait, may spring for a new device instead of a new virtual MVPD. He specifically called attention to YouTube TV's unlimited DVR, which means most subscribers have amassed a large library of recorded shows that would take months to reacquire from a competitor service.