Roku's New Update Leaves Users Locked Out Until They Agree to Dispute Terms

Roku Inc ROKU faced backlash from users nationwide after implementing a mandatory agreement to new dispute resolution terms, which included forced arbitration, effectively barring users from participating in lawsuits against Roku. 

Users found their devices inoperable until they agreed to these terms. 

A critical update to the terms introduced an “Informal Dispute Resolution” process, requiring legal complaints to be addressed directly with Roku’s legal team first, TechCrunch reports.

This change, made last fall but only recently enforced, has sparked user frustration on forums. 

To opt-out, users must mail a written notice to Roku’s lawyers, a process criticized for its inconvenience and lack of transparency. 

Despite the uproar, the terms hadn’t changed significantly in a while, but the enforcement method—rendering devices unusable without consent—drew significant ire. 

Users expressed discontent over the need for a straightforward electronic opt-out method, pointing out the inconvenience of mailing a physical opt-out form.

In February, Roku reported fourth-quarter revenue of $984.43 million, up 14% year-over-year, beating the Street consensus of $968.24 million.

The EPS loss of $(0.55) lagged the Street loss estimate of $(0.54).

Roku added 4.2 million net accounts. Average revenue per user declined by 4% to $39.92. The company had 29.1 billion streaming hours, up 21% year-over-year.

Analysts remained skeptical over the stock’s prospects until it returned to growth.

Investors can gain exposure to the stock via ARK Next Generation Internet ETF ARKW and ARK Innovation ETF ARKK.

Price Action: ROKU shares traded lower by 0.54% at $62.45 on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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