Week In Review: Roku and Peacock Come To Terms, Quibi For Sale

1. Roku and Peacock Come To Terms

After a standoff that lasted around two month, Comcast and Roku have come to terms and the Peacock app is now available on Roku devices and smart TVs. 

The dispute seemed to come to a head last week when Comcast threatened to pull its TV Everywhere apps from Roku, to which Roku allegedly said something to the effect of “go ahead, no one watches them anyway.”

Somehow cooler heads prevailed (the exact details of what each side offered are not available though they likely have something to do with ad revenue) and a deal for Peacock and the TVE apps was struck.

Why It Matters

Wall Street clearly thought Roku got the better deal, as Roku stock rose 17% on the news.

TV[R]EV, on the other hand, thinks they both made out nicely--Peacock needs the distribution that Roku can give them and Roku needs to make sure they don’t cede their role as the “Switzerland of streaming devices” to Apple, which, having no ad platform of its own, has had an easier time luring the various Flixes to its platform.

While Comcast coming to terms with Roku certainly puts some pressure on HBO, whose Max app has been struggling to get subscribers, Max is a different beast in that it’s a subscription app and Roku will be wanting a share of that subscription revenue. 

That situation is made even more complicated by the fact that HBO and Roku previously had a deal whereby Roku sold subscriptions to HBO NOW, and so both sides now know exactly how that will play out and what the pros and cons are.

Then of course, there’s Amazon, which does not have any sort of deal with either app.

I’ve long maintained that Amazon is a much less attractive deal for the Flixes in that if a use subscribes to HBO via Amazon, they will see suggestions for HBO series right there on the home screen as soon as they boot up their Fire TV, which makes it fairly unlikely they’ll ever bother to click on the HBO Max app. 

Compare that to Roku, where aggregation takes place not on the home screen, but rather, on The Roku Channel app, making it far less likely the user looking to watch an HBO show will wind up bypassing the native HBO Max app.

So there’s that.

There’s also the fact that unlike the cable companies, clearly the bad guys in any old school carriage dispute, Roku and Amazon are well liked companies that don’t try and price gouge their customers, and thus are likely to wind up with their customers on their side.

And since between them, they control around 70% of the streaming market, that’s a lot of customers.

What You Need To Do About It

If you’re AT&T, you need to decide whether all those viewers you’re losing by not having Max on Roku or Amazon are worth whatever you’ll get by holding firm--especially given that neither Amazon nor Roku has any compelling reason to compromise right now. Factor in that you’ve got eight competitors all currently vying for the same pool of subscribers and that you’re the one with the  highest price point and worst distribution.

If you’re Peacock, well done. You’ll get a lot more viewers this way, collect a lot more email addresses and right now the goal for any Flix would seem to be to get as many subs as possible given the Wild West nature of the space and high potential for churn. Oh, and extra points for not calling yourself “Peacock+”.

If you’re Amazon, the ball is sort of in your court. You run the risk of losing customers to Roku because they have the apps that viewers want to watch and you don’t. On the other hand, given your massive reach and ability to pretty much hand out Fire TV sticks for free, that may not matter much to you right now.

If you’re a viewer, definitely check out Peacock--it’s free and it has a lot of shows you can’t find anywhere else right now. 

At least not legally.

2. Quibi For Sale

In news that surprised just about no one, there are rumors that Quibi, the hapless short form subscription streaming service that raised billions of dollars from people who should have known better is now for sale.

Why It Matters

Quibi was a solution to a problem no one had. 

As I and numerous other people had noted, Netflix and all the other Flixes come with “pause” buttons and mobile apps, so had I wanted to watch high quality short form programming on my phone, multiple solutions were already in place.

I mean it’s not as if Quibi shows were perfectly timed to coincide with my commute. (Remember those?)

More than that, none of their shows ever really broke through or gathered much buzz.

Then there’s the question of who would buy them, why and what exactly would they be buying, three questions I have yet to hear a convincing answer to.

My colleague John Cassillo suggested that TikTok might be a good home for Quibi--they could use some of their creators to launch a “professional” (versus user-generated) level to the app, but TikTok is most decidedly not buying anything right now, least of all Quibi, so that seems to be more of a theoretical suggestion than anything.

Maybe Triller, the American version of TikTok would be an option, but I’m thinking they don’t have the kind of cash that Team Quibi is looking for. At least not now.

Well, whoever winds up buying Quibi, it will make an interesting ending to what is sure to be a popular Harvard Business School case study on why success in one area does not guarantee success in another. 

What You Need To Do About It

If you’re Quibi, good luck. You hired a lot of smart people, you tried to make something happen, but sometimes the market just isn’t there.

If you’re a venture capitalist, remember that it’s pretty rare for someone to have two really solid ideas and that some of the dumbest ideas come from people who’ve been successful doing something else and are at a point where everyone’s afraid to say “no” to them. (Something about an emperor and his new wardrobe.)

If you’re an advertiser and you committed a chunk of your ad dollars to Quibi, it’s probably time to relook at OTT/CTV. There’s just something about seeing an ad on TV you can’t recreate on mobile. Even if it is mobile video.