Roku shares rise on deal that restores YouTube TV app

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Shares in Roku Inc. jumped as much as 20% on Wednesday after the streaming device maker signed a multi-year deal with Alphabet Inc. restoring the YouTube TV app to its service.

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ROKU ROKU INC. 103.85 -7.00 -6.31%

Roku had removed the YouTube TV app from its Channel Store in April amid a dispute over the display of search results on Roku’s platform. The YouTube TV app allows its subscribers to watch dozens of live TV channels online for a monthly fee; the most popular free YouTube app remained available on Roku.

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The agreement extends the agreement between the two companies and will make YouTube and YouTube TV available to all Roku streamers. Specific terms were not disclosed.

“This agreement represents a positive development for our mutual customers,” said a Roku spokesperson.

A YouTube representative was unavailable for comment. It emailed users on Wednesday to say its TV app was back in the Roku Channel Store.

ROKU TAKES A STAND AGAINST GOOGLE BY REMOVING YOUTUBE TV FROM THE STORE

Shares of Roku closed up 18.2% at $256.08 after hitting a high of $260.99.

The stock rose around 148% in 2020 as the Covid-19 pandemic kept more people home and led to increased usage of streaming.

Shares have fallen 35% this year, through Tuesday, amid a slowdown in new account additions. In November, Roku officials blamed the slowdown on supply chain delays that disrupted the U.S. TV market.

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The spat between Roku and YouTube TV echoed distribution disputes between cable companies and their channels, and showed Roku’s role in the age of streaming.

Roku is considered the biggest manufacturer of streaming devices in the United States

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Roku sells smart TVs with built-in streaming technology, as well as devices that users can plug into the TVs. The company generates the bulk of its revenue by selling advertisements on streaming channels and taking a share of subscription revenue and ad inventory from streaming services.

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