In 2014 Chinese electronics manufacturer, TCL, didn’t think that much about sharing in the value of including Roku with their TVs. Their 2014 deal astonishingly included $0 for them to include that with their TVs.
Now that they have over a quarter of all the smart TV market, TCL wants in on the Roku market.
Sensing a missed opportunity, TCL has been working with other TV software providers to capture more customer revenue. In March 2020, the company announced a target of “profit from value-added Internet services exceeding 50%,” sending Roku’s shares down 5%.Roku Stock Has a TCL Problem. Shares May Sink 35% | InvestorPlace
The irony mentioned in the headline for Roku is this is the same kind of play they’re currently making with HBO and Peacock (see: Hey Roku, Peacock has 10+ million signups and HBO Max 4.5+ million)
What comes around goes around.
Will we ever see HBO Max and Peacock on Roku? I think the answer is yes (related, see: Why not put the deal terms with Roku and Amazon Fire out there for everybody to see, HBO Max and Peacock?).
For those who haven’t been following the kerfuffle, Roku and Amazon for their popular Fire stick believe they have the upper hand being that they serve as gateways to some 70% of the streaming households. HBO Max and Peacock feel they deserve to get the same treatment as Netflix, despite HBO roots as starting as an add-on premium service and Peacock being new. I left out Quibi, but they also aren’t on Roku or Amazon Fire stick.
Why do I think Roku will cave? Because they need HBO more than the reverse. HBO has been making original content since the 70s, long before anybody even knew what Roku was.
As for Peacock? They are big enough to go it alone for awhile. I’d think it’s more likely they cut a deal with Roku before HBO.
Quibi? Dart throw, it’s anybody’s guess where they land. My opinion only, but I don’t think Quibi is even in the discussion a couple years from now. Somebody bigger will likely buy them (Apple, perhaps) for their originals and creative pipeline, axe the nonsensical 10 minute clips and the company will be a historic footnote.
Back to this TCL deal. This is bad news for Roku. They cut a very smart deal in 2014, but doesn’t sound like they can benefit the same way from that any longer.