Roku and YouTube Are Battling for Your Precious TV Data

Smart TV companies and streaming platforms track our viewing habits, spinning them into gold for retailers and politicians who want us to stream, shop, or vote a certain way. The market ballooned in the age of quarantine binge-watching. Now, a surprisingly public, surprisingly nasty spat between two key players, YouTube and Roku, offers a fascinating look at the billion-dollar market built on what we watch.

In early May, streaming provider Roku called YouTube parent Google an “unchecked monopolist,” after contract negotiations between the two broke down. The contract for including the YouTube TV app on Roku devices was expiring. The two companies negotiated terms for renewal, but Roku said Google made multiple anticompetitive demands.

In an email to users, Roku said Google asked it to manipulate consumer search results in favor of YouTube videos, that Google requested access to sensitive user data, and demanded that Roku use more expensive parts in its devices, which would drive up the cost.

Google countered by calling the accusations “baseless and false.” When Roku removed YouTube TV from its devices, Google presented a workaround by making YouTube TV accessible via the main YouTube app. YouTube TV offers live television and sporting events, marketing itself as an appealing alternative to those looking to cut the cord on a traditional cable box.

The feud revealed what’s most valuable about connected TVs: the data they capture and the ad dollars they generate. In 2020, connected TV advertising topped $ 9 billion, according to eMarketer.

Roughly three-quarters of US households have an internet-connected TV, either a smart TV or one connected to a plug-in device like Roku or Amazon Fire. This means millions of people across the US have agreed to some form of online tracking of their viewing behavior. This data is so valuable that the entire smart TV ecosystem revolves around its collection.

Roku has 50 million users and reported record 79 percent revenue growth during the pandemic, largely bolstered by advertising. Meanwhile, twice as many users watch YouTube on TV (either natively “smart” or equipped with a plug-in like Roku or Amazon Fire) than on a computer.

Asked for comment, both YouTube and Roku referred WIRED to their previously published statements on the matter.

It’s pretty well known that YouTube keeps tabs on what its logged-in users watch, collecting data and using that to push more recommendations and fine-tune ads. That’s not dissimilar from what hardware providers call “post-purchase monetization,” the many ways in which companies make money from what you watch. Roku keeps tabs on what you watch, as do TV makers like Vizio, LG, and Samsung.

As with social media companies, more users means more data, means more ad revenue. Smart TVs and plug-in devices use a technique called ACR (automatic content recognition) to track everything you watch. From there, they infer certain things about you.

Does a user watch Nickelodeon often? They probably have kids. Do they watch the local news in the morning, but nothing in the afternoon? They’re probably an early riser who still travels to work. All this information is useful to advertisers, who want to put their message in front of the right person at just the right time.

Roku’s recent moves indicate that it plans to be more than a streaming provider. In 2019, it acquired DataXu, an analytics company specializing in linking an individual user to all the devices they use for streaming. Since then, Roku has rebranded the company and began highlighting its own ability to fine-tune targeted ads to specific audiences (single men who love hockey, young parents who support environmental causes, etc.) as they go from their TV to their tablet and so on.

Author: Sidney Fussell
This post originally appeared on Business Latest

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