Roku Inc (NASDAQ:ROKU) kicked off Monday with strong bullish momentum that saw its stock price rally by more than 13%. The strong performance highlights the positive sentiments by investors after the company announced the addition of NBC’s Peacock streaming service to the Roku platform.
NBC Universal launched the much-hyped Peacock streaming service in July and has been available on other platforms except for Roku. The reason for the demand is that it offers a free version where users can access free content alongside a paid version.
Why it took a while before Peacock was available on Roku
The delay in rolling out the Peacock streaming service on the Roku platform was because Roku and NBC Universal were stuck in lengthy negotiations. They had trouble finding some middle ground regarding revenue sharing. However, they managed to come to an agreement that ended the revenue sharing standoff and both parties are optimistic that the agreement will support strong mutual benefits.
"We are excited by the opportunities to integrate NBC content within The Roku Channel while we also work together with Peacock on the development of significant and meaningful advertising and ad tech partnership," stated Roku’s vice president of content acquisitions, Tedd Cittadine.
The two companies are yet to disclose the terms of their revenue-sharing agreement. Roku has become an increasingly popular platform for content and this explains why it has become so popular. This means that its bargaining power when it comes to revenue sharing is also growing. Cittadine’s statement about the company finding a middle ground that benefits both parties thus means they were able to secure a favorable deal.
Cittadine also noted that the deal was exciting because it provides an opportunity for Roku to integrate NBC’s content within its platform. It will also allow Roku to expand its advertising opportunities, which translates to more revenue opportunities in the future. Peacock’s rising popularity with content consumers sweetens the deal even further. The synergies between the two platforms makes it a lucrative opportunity from which they will both benefit significantly.